Hines Steps Away from Aussie BtR Development

International investment manager Hines has put all three of its Melbourne-based build-to-rent sites to the market as it signals a move out of development of the asset class. The Houston, Texas-based Hines partnered with Canadian firm Cadillac Fairview in 2022 to fund its build-to-rent moves in Australia to the tune of $1.5 billion. The Ontario Teachers’ Pension Plan that owns Cadillac Fairview announced changes to its real estate investment strategies in late 2023. It now is more focused on income-generating assets in the Asia-Pacific region. That means Hines’ Australian focus has also shifted, from developing build-to-rent sites to managing and operating existing assets. As a result Hines now has its three site—15-37 Bank Street at South Melbourne, 10 Ballarat Street at Brunswick and 36-58 Macaulay Road at North Melbourne—on the market. Hines acquired two Arklife assets in Brisbane in October of this year, Hines head of Australian and NZ David Warneford said those acquisitions showed that the company was still pursuing build-to-rent. “Both the Arklife acquisition and our pivot to exit the three sites affirm our longstanding partnership with Ontario Teachers,” he said. “Hines is committed to working closely with our investors to help create value and offer more high-quality homes to tenants.” The 3368sq m site at South Melbourne is within the Domain Precinct. Hines holds a planning permit for a mixed-use development for the site, the first of its assets to be listed. That permit allows 355 apartments alongside three existing office buildings with a multi-level carpark, 380 carparking spaces and a height limit of 60 metres. Rothelowman designed the plans for the scheme, that comprises 20,603sq m of net saleable area in the apartments. The site has frontage to Bank Street and access from Little Bank Street. ▲ Hines will list its 10 Ballarat Street site at Brunswick, where it had planned a 250-apartment build-to-rent project. The site is 300m from the Anzac Train Station, which is due to be completed next year, and is within walking distance from the South Melbourne Market and Clarendon Street Shopping precincts. The Royal Botanic Gardens, the Shrine of Remembrance and Albert Park Lake are also nearby. Melbourne Grammar School, the Mac Robertson Girls High School, South Melbourne Primary School and Albert Park College are nearby. Hines’ initial application with the City of Port Phillip council listed a development cost of $130 million as of January, 2023. The site is made up of three allotments— Hines bought the first two lots for $40 million in 2022 and added 35-37 Bank Street for a similar figure in May 2022. CoreLogic records show that before the Hines move, the first two lots had last changed hands in March, 2016 for $22.5 million and $7.5 million, while 35-37 Bank Street was sold in April, 2022 for $6.5 million. The North Melbourne site, which was to comprise 250 apartments, was bought for $30 million in early 2022 while the Brunswick site has an end value of $250 million for 250 apartments. Hines is the second largest global build-to-rent developer with 51,000 properties in the US and the UK, and $117 billion in real estate assets under management. In January, 2023, Hines had more than 850 build-to-rent units globally with an approximate end value of $820 million. Its rival in the space, Greystar, has opened the first part of its own build-to-rent assets at South Melbourne. In May of 2023, Hines told The Urban Developer that there were challenges in the industry but that it was bullish about continuing with build-to-rent projects. “There are challenges that we all face,” the now-former Hines managing director and head of living Australia Sam Bisla said. “There’s construction costs escalation, land is arguably scarce and planning is difficult. “But they’re all surmountable and we will continue to push on.” The site is for sale via an expressions-of-interest campaign being run by CBRE’s Trent Hobart, Andrew Purdon, Alex Shaw and David Minty that cloes on December 6 of this year. ▲ Hines will also offload its Macaulay Road site at North Melbourne that holds a permit for 250 apartments. Meanwhile, a private developer has bought a site near the Pentridge Prison redevelopment project at Coburg, 8km north of Melbourne’s CBD. Golden Peak Developments sold the 1100sq m site at 45 Pentridge Boulevard for $9.75 million with a permit attached. That permit allows for more than 200 apartments with a total residential net saleable area of 14,700 square metres. The site is part of the Pentridge Village Precinct of the Coburg Major Activity Centre and is at the corner of the gateway entrance to the Pentridge Village, where Pentridge Boulevard and Urquhart Street meet. Cushman and Wakefield’s Joe Kairouz, Hamish Burgess and Leon Ma negotiated the deal.

Hines Steps Away from Aussie BtR Development

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