A completed build-to-rent precinct in Melbourne’s inner-city has come to market for a second time.
On the block is a 100 per cent freehold interest in Union Quarter Village at Spotswood, 7km south-west of the Victorian capital’s CBD.
The precinct comprises four buildings of three to eight storeys on a 2ha site at 31-69 McLister Street.
There are 332 apartments, including 32 SDA apartments and four onsite overnight assistance apartments across two of the buildings.
The precinct also includes a retail centre of more than 11,000sq m anchored by Woolworths and Dan Murphy’s as well as a health and wellness facility.
The development is being offered for sale via an expressions-of-interest campaign due to close on June 27.
That campaign is being managed by Colliers and Savills.
The precinct was the subject of a similar campaign by Knight Frank and Savills in September last year in what was labelled the first large-scale completed build-to-rent asset to be offered to the market in Australia. A sale was not forthcoming.
Colliers residential capital markets, national director, Robert Papaleo said the owners of the build-to-rent had fielded several approaches to sell after it had completed and tenants began moving in, and so had decided to put Union Quarter Village to the market.
He told The Urban Developer that about 45 per cent of the apartments were occupied as at the end of April, and that the precinct’s Woolworths supermarket and Dan Murphys had opened, with several other larger retailers as well as smaller speciality stores being fitted out ahead of their openings.
A childcare centre is also planned.
Papaleo said there had been “solid interest” in the Spotswood asset as a turn-key investment that would “produce income from day one”.
Colliers said that the significant change to Foreign Investment Review Board (FIRB) policy announced in the 2024 Budget would allow international investors to directly own established residential property but only if it was a complying operating build-to-rent asset such as Union Quarter.
Previously, FIRB rules prohibited foreign entities from owning established housing unless they were to be redeveloped for additional housing.
“The recent FIRB policy change removes a significant barrier to international investment into Australia’s build-to-rent market that will also support new development by creating greater liquidity and a wider purchaser pool for trading BtR assets,” Papaleo said.
Savills operational capital markets head Conal Newland said that with many investors wanting exposure to the strength of Australia’s $10.3- trillion residential asset class fundamentals, the investment in Union Quarter did not require taking any development risk.
Work on the build-to-rent neighbourhood, which was developed by the family-owned Suleman Group, began in September 2020.
The group is the development arm of the Suleman family headed by fresh flower mogul Sam Suleman.
Work came to a halt on the project when builder ABD group went into voluntary administration in November, 2021. It later went into liquidation, and the project was completed by Hickory.
Delve into key trends, challenges and opportunities within the build-to-rent sector at The Urban Developer Build-to-Rent Summit on Thursday, June 30 in Melbourne. Click here to learn more.
