Property developer Pellicano has kicked-off construction on its build-to-rent project in Melbourne’s inner-north suburb of Brunswick, targeting a 2022 completion date.
Pellicano will retain ownership of the project under its ‘Pellicano Living’ banner.
The $46 million project will comprise 70 apartments ranging from one, two and three-bedroom dwellings at its 212 Albion Street site.
On purchasing the site, Pellicano managing director Nando Pellicano said the company considered both build-to-rent and build-to-sell models.
“But taking into consideration current market conditions we felt build-to-rent was the best option for the site right now,” Pellicano told The Urban Developer.
“Given the project is in Brunswick, which has quite a young and transient population, we also felt there would be a strong appetite for an injection of quality rental product in the area.”
Pellicano added that the project, known as Solarino House and designed by 6-Degrees Architects, was viable because the council had offered a 50 per cent reduction in the car parking required on site, “which shaved about $1,500,000 off construction costs”.
The site is close to Anstey train station, which Pellicano says offers public transport options to future tenants.
Property data shows the 212-214 Albion Street Brunswick site last transacted for $6.38 million in May 2018.
The family company said it has worked with the build-to-rent model since the early 1970s when it developed Clayton House, a 24-townhouse collection, which the developer continues to own and currently manage.
Pellicano Living now includes around 500 apartments across six properties, with a further eight build-to-rent properties said to be in the pipeline.
“Build-to-rent is a model we’re committed to as a business off the back of these projects,” Pellicano said.
The build-to-rent sector is gaining momentum in Australia.
Across the country, up to 2,326 build-to-rent apartments were completed by the end of June 2020, according to Savills’ analysis; while CBRE research estimates a pipeline of more than 10,000 units is under due diligence.
Under the agreement, Frasers Property will develop a 25-level building comprising 354 apartments at 210 Brunswick Street in the inner-Brisbane suburb of Fortitude Valley.
Of the project, 144 apartments will operate under the scheme, with the state government subsidising the apartment rentals by 25 per cent.
Similarly, Mirvac will deliver a 390-apartment project at 60 Skyring Terrace in Newstead, of which around 99 will be affordable housing apartments offered to eligible tenants.