The trend of Japanese companies investing in Australian property and development projects has continued with major developer Lendlease announcing a partnership with Nippon Steel Kowa Real Estate (NSKRE).
“This announcement also highlights the continuing demand from our Japanese partners for high-quality opportunities across our development pipeline, and we look forward to working together to deliver on NSKRE’s first project in the Australian market,” Lendlease development chief executive Tom Mackellar said.
NSKRE will partner with Lendlease on a $500-million build-to-rent project at 899 Collins Street in Melbourne’s Docklands.
It will take a 40 per cent equity share in the project with the move, which is its entry into the Australian market after experience developing and leasing offices and selling condominiums in Japan.
“NSKRE has always prioritised collaborating with reliable local partners when expanding our operations overseas,” NSKRE international business managing director Itaru Ishihara said.
“We believe that implementing this project aligns perfectly with our corporate mission, ‘Communicating with People, Creating the City’.”
Lendlease filed plans for the project which sits next to their Collins Wharf precinct in May, 2023.
The plans for the 24-storey building in Docklands’ Victoria Harbour, which will have 499 apartments were approved in January 2024.
Planning approval was granted after the City of Melbourne’s planning committee, Future Melbourne Committee, supported the application in November 2023.
The apartment mix is 56 studio apartments, 198 one-bedroom, 224 two-bedroom and 21 three-bedroom apartments.
There will be 103 carspaces across the podium plus 412 bicycle spaces and four motorbike spaces, with vehicle access from Tom Thumb Lane.
Plans also include an outdoor pool overlooking Victoria Harbour, a dog park and a rooftop barbecue area as well as music and podcast rooms, lounges, a gym, a cinema, wellness treatment rooms and private dining rooms.
The project will be all-electric and will aim for a 5 Star Green Star Building rating.
Lendlease will develop and build the project and function as the investment manager for the project with a view to bringing on other partners as the project progresses.
Early works have started with construction scheduled to begin this year and end in 2026.
It will be the third build-to-rent project by Lendlease in Australia, following Exhibition Quarter in Brisbane and the Melbourne Quarter project now being built.
Lendlease has 2700 build-to-rent apartments in its pipeline with another 2800 being managed.
The 6.5ha Collins Wharf precinct next door will have 5100 apartments when all five towers are built with an estimated cost of $1.5 billion.
Development in the Docklands has been overseen by Development Victoria since the mid-1990s with many of the projects now completed and the last few vacant sites remaining to redevelop.
NSKRE’s involvement follows on from the news of Japanese company Sumitomo buying into Australian construction giant Metricon as developers and builders alike look overseas for answers to rising construction costs.
However, a Nine masthead reported the heightened Japanese interest in Australia would run out in 18 months, quoting mergers and acquisition lawyer Ian Williams.
Tough conditions and lower sales lately had meant Australian builders were valued at what the Japanese regarded as a fair price, Williams, who also chairs NEX Building Group, was reported as saying.
But as the sector rebounded over the next year and a half, the Japanese would close their wallets, he said.
