Build-to-rent trend in tearaway growth mode worldwide
LOS ANGELES: The multigenerational build-to-rent trend has now entered a tearaway growth trend around the world.
Malaysian development giant UEM Sunrise has locked in living-sector specialist Kio Investment Management to invest in its build-to-rent project in the Melbourne suburb of Collingwood in a $315m deal.
The scheme will deliver more than 400 apartments and contribute additional housing supply in inner Melbourne as the national rental crisis starts to bite again in the wake of the federal budget.
Kio, a joint venture between US private equity firm Warburg Pincus and industry specialist Sam Bisla, will “forward fund” the project for which UEM Sunrise will be developer. Kio will become owner-operator of the completed project.
The company swooped after an earlier deal did not go ahead, with the latest transaction brokered by Trent Hobart of CBRE.
Rival US group Greystar had agreed in 2023 to invest in the Collingwood project and then run the proposed build-to-rent units. But the venture was terminated last year as its strategy shifted.
UEM Sunrise chief executive Shaharul Farez Hassan says the new partnership marked a significant milestone in advancing the Collingwood project amid growing demand for rental housing in Melbourne.
“The Collingwood project is a key part of our growth strategy and reflects our continued commitment to expanding our development portfolio. With our established track record in Melbourne, we are well-positioned to deliver housing in a well-connected urban location,” he said. “This project also reflects our disciplined approach to partnering as we continue building our presence in Australia’s growing build-to-rent sector.”
The Collingwood project underscores the growing challenge of housing affordability in inner-city precincts, where escalating home values and tighter credit conditions have pushed home ownership increasingly out of reach for many people. Institutional investment in rental housing is helping to bridge the gap by providing quality, long-term rental options.
The build-to-rent sector remains in an emerging phase, representing less than 1 per cent of the country’s total housing stock. However, it continues to attract growing institutional capital as developers partner with global investors to fund rental housing supply.
Melbourne has become the country’s most active build-to-rent market, with a concentration of institutional projects in the inner city, while Sydney has been hampered by high land costs.
The project at 21-53 Hoddle Street will include more than 400 dwellings across two buildings with a mix of studio, one-, two- and three-bedroom apartments.
The site at the eastern gateway to Collingwood will include a public town square at the heart of the site sporting food and beverage options, retail spaces, essential services and landscaped greenery. Early construction works are expected to commence towards the end of 2026, with completion targeted for 2030.
“We see strong long-term fundamentals for institutional rental housing in Australia and are focused on well-connected inner-city locations such as Collingwood,” Mr Bisla said.
“This project aligns with Kio’s strategy of building a leading institutional living platform across Australia’s key gateway cities, underpinned by long-term ownership, operational excellence and resident-focused communities.”
Kio has rapidly set up a residential footprint of over 1,200 units in prime markets via a series of transactions and developments across Sydney, Melbourne and Brisbane.
Kio launched last year with plans to complete developments with an end value of more than $1bn.