Gurner, Qualitas Raise $1.2bn Build-to-Rent War Chest

Developer Gurner and capital investment partner Qualitas have successfully closed off a capital-raising campaign with almost $1.2 billion in the can for their joint build-to-rent platform.

The group aimed to raise $1 billion, which was cornerstoned by an unnamed global institutional investor alongside co-investment from Qualitas and Gurner.

The $1.2-billion war chest will be used to fast-track the construction of 1700 apartments and fund the acquisition of further build-to-rent assets in Sydney, Melbourne and Brisbane.

The group aims to build more than 5000 apartments during the next few years.

The first build-to-rent project under the joint platform will be the recently announced $450 million Parramatta project, a 385-apartment 61-storey tower on a 2049sq m site.

Gurner founder Tim Gurner said it had been “humbling” to witness strong support for the capital raise campaign.

“The capital markets for build-to-rent right now are extremely competitive, and being able to secure this funding against such competition to launch our platform is very exciting,” Gurner said.

“With majority of the capital now allocated we will soon be commencing another round of capital raising in the coming months as we look to aggressively grow the size of the fund, and as we prepare to commence construction across various projects in the next 12 months.

“We have an ambitious plan for what we want to achieve in the build-to-rent space, and look forward to focusing on delivering a product that will provide a genuine point of difference to the sector.”

Gurner said their build-to-rent assets would be targeting buyers who wanted the “service and amenity of a five-star hotel” in a luxury home setting.

“We are now heavily focused on the Sydney market in particular for further sites to build the portfolio. With market penetration across the eastern seaboard we can create the largest and most sought-after platform in Australia, which is certainly our ambition.”

Qualitas global head of real estate Mark Fischer said the overwhelming response to the capital raising had signalled a strong belief in the future of the build-to-rent sector.

“Across Australia we are anticipating strong and growing demand for high-quality build-to-rent assets as population growth and declining home ownership drive the need for quality rental stock,” Fischer said.

“The scale of our debut capital raising in the build-to-rent sector and its support from blue-chip institutions is vindication of our decision to pursue a fully vertically integrated model for build-to-rent.”

Fischer said the group had quickly put the capital work on current projects and would look to carry out a second fund raising early next year. He said the asset class provided “defensive and resilient cashflows”, which was attractive to global institutional investors.

The group’s first build-to-rent project, on the site of the former Parramatta PCYC at 12 Hassall Street, was acquired for about $70 million, taking over from Toplace and building on the developer’s 2017 plans for the site.

In September 2021, they teamed up with Newmark Capital to turn Melbourne’s Jam Factory into a $1.5-billion mixed-use precinct.