Nightingale Shines Light on New Build-to-Rent Model

With the big rental squeeze on in Australia’s most expensive property market, a not-for-profit out-of-town housing provider sees Sydney as the perfect place to put its unique development model to the test in the burgeoning build-to-rent sector.

Melbourne-based Nightingale Housing has made its move into the Harbour City bringing its “teilhaus” or micro units concept to a 55-apartment development in inner-west Marrickville.

“It’s a bit of a testing ground really,” Nightingale’s development manager Maria Yanez said. “It’s our only build-to-rent project so far.

“Our belief is that the rental market in Sydney has to be targeted more than the owner-occupier market, so we’re testing it out to see how the market will respond to these micro units we’re delivering as a build-to-rent model in Marrickville.”

Sydney’s rental housing vacancy rate has fallen to a decade low of 1.3 per cent.

Teilhaus is a German word meaning “part of house” and is used by Nightingale to describe its apartments—rather than calling them studios—because it is a community-focused model that also offers a lot of common space, amenity and active streetscapes.

Its debut SJB-designed build-to-rent project in Sydney will comprise apartments ranging from 20sq m to 50sq m that will be rented for 25 per cent less than the market value.

Yanez, who will be speaking at The Urban Developer’s Affordable and Social Housing vSummit on Thursday, October 27, said the project was being driven by the critical shortage of rental housing in Sydney as well as demand for smaller footprint living in Marrickville, but was only made possible through a partnership with Fresh Hope Housing Incorporated.

▲ Nightingale Housing development manager Maria Yanez and a render of the not-for-profit housing provider's Marrickville build-to-rent project.

The Churches of Christ ministry arm for NSW and ACT was seeking a way to relieve rental affordability stress in the area and offered a disused church at Marrickville for the project.

“It was really the only way for us to access the Sydney housing market,” Yanez said. “Because just the price of the land is three times what it is in Melbourne and it’s really difficult to make a feasibility work.”

Even so, getting the project out of the ground has not been without its challenges with an initial development application rejected by the Inner West Council and an interim heritage order placed on the building.

But after a successful appeal through the NSW Land and Environment Court, the ground-floor concrete slab has been poured and the project is due for completion in mid to late 2023.

Tenants for the Marrickville project will be chosen through a ballot.

“We use this ballot system across all Nightingale projects, it means that everyone who applies to live in a Nightingale home has a fair chance of being becoming a resident, regardless of how much money they have in the bank,” Yanez said.

If all goes to plan with its build-to-rent “teilhaus” trial and development curtain-raiser in the Sydney market, Nightingale will potentially look to replicate the new model, including bringing it to its home state.

“We'd love to,” Yanez said. “We’re testing the model and we’ve definitely had the conversation and are evaluating the possibility of doing build-to-rent in Victoria.”

Join us on Thursday, October 27 when Australia’s leading developers, investors, designers and advisors working within the social and affordable housing sector present the different models for developing affordable housing at The Urban Developer Affordable and Social Housing vSummit.