Scape Wins Overseas Backers for $1.5bn NSW BtR Project

The co-founders of Australia’s largest student accommodation provider have secured backing from Dutch pension giants for a $1.5-billion build-to-rent development in Sydney’s inner west, marking one of the country’s largest rental housing projects to date.

The Timberyards development, at Victoria Road, Marrickville, will deliver 1190 homes across seven buildings ranging 8 to 13 storeys.

The developer is listed as Rent-to-Live Co. (RTL Co.)—a new business for Scape Australia founders Craig Carracher and Stephen Gaitanos. 

The project, on a 2.2ha site 4km south-west of Sydney, will comprise 488 build-to-rent apartments, 111 affordable housing units, and 591 co-living homes, alongside 2057sq m of retail space.

It will also feature communal areas, publicly accessible open space and retail offerings.

The secretary’s Environmental Assessment Requirements (SEARs) document also mentions the extension and augmentation of local infrastructure to support the new precinct.

This is expected to generate less traffic than initially anticipated, improving local road network performance.

Carracher and Gaitanos have established a residential rental fund that has attracted investment from the Netherlands’ largest pension provider, APG, and property fund manager Bouwinvest.

Having secured about $1 billion in equity capital to date, Scape aims to develop 10,000 apartments by 2030. But Carracher said the fund would have “double the capital we now have but for delays in legislation”.

High construction costs and government delays were hindering build-to-rent development in Australia, Carracher said, who felt the current foreign tax regime was a significant barrier, despite promised reforms. 

“The Timberyards is the first of many projects in our ambition to democratise the rental market. Sydney is our focus and with our scale and expertise in this market we believe we can make an immediate impact,” Carracher told media.

The development, which is designated a state significant development, is fully funded and awaits approval from NSW government planners.

The site was rezoned in 2017 from industrial to mixed-use and high-density residential and forms part of the Victoria Road corridor revitalisation at Marrickville.

The project is expected to generate 750 direct construction jobs and 2500 indirect jobs during development, with 160 full-time equivalent positions supported annually once operational.

▲ Stephen Gaitanos and Craig Carracher founded Scape Australia in 2014.

The site is a 10-minute walk to Sydenham Railway Station and the new Sydenham Metro Station, and a seven-minute train ride to Sydney’s CBD.

The development will incorporate elements of the existing warehouse into its design, paying homage to the site’s industrial heritage.

The project has emerged as governments face mounting pressure to address Australia’s housing crisis, which has driven up rental costs and reduced availability, particularly in inner-city areas where key workers are most needed.

“In the end, government can never build enough houses to solve the supply side problem and instead of damaging supply-side confidence with demand-side levers—like immigration clamps—the Government and Opposition should stimulate the market players,” Carracher said.

“[They] should back proven operators to deliver a more diversified residential product mix to market. Social and affordable housing is vital to relieving pressure on rental markets through build to rent.”

Scape and RMIT University are also collaborating to create a student living tower in Melbourne. The 10,000sq m Scape Franklin building will be integrated with RMIT Training, offering students convenient access to housing and academic facilities.

The Timberyards venture marks an expansion beyond student accommodation for Carracher and Gaitanos, who established Scape in 2014.

Now Australia’s largest residential-for-rent owner and operator, Scape manages nearly 19,000 beds across 38 assets in major cities, with an additional 4000 beds under development.

Scape recently achieved industry recognition for sustainability, becoming the first in the student accommodation sector to receive a 6 Star Green Star Design and As Built rating from the Green Building Council of Australia.

This sustainability focus will extend to The Timberyards development, which aims to incorporate environmentally sustainable design principles.

This significant investment in Sydney’s rental market comes as the Federal Government considers halving the tax rate applied to foreign investment schemes from 30 per cent to 15 per cent.

It’s a move industry players argue is crucial for unlocking additional development capital in the build-to-rent sector.