Macquarie Group-backed build-to-rent platform Local has paid an undisclosed amount for a development-ready, 40-storey tower project in South Melbourne.
It’s the second project for the new kids on the block, who acquired the $280 million turn-key operation from private developers, Blue Earth Group.
Blue Earth will partner with Melbourne-based apartment and commercial builders Hamilton Marino to deliver the 421-unit tower, in what is effectively a fund-through agreement.
Local says the CHT Architect-designed project in Normanby Road, South Melbourne, could start construction as early as October. They are forecasting an early 2025 completion date.
The original design has been amended to add more communal space, enhance the ground floor offering and create a fully electric building aimed at a carbon neutral operation. That amendment is pending.
The finished tower will offer private dining, games and yoga rooms, a gym, lounge and dining facilities, co-working spaces, a café and wine bar, lap pool as well as nearly 600sq m of outdoor space.
Local chief executive Dan McLennan said the market fundamentals for build-to-rent were particularly strong and continuing to gain pace.
“The scale of this particular project supports our model of incorporating ‘salt and pepper’ impact housing in our developments and is just one of many build-to-rent projects currently in the Local pipeline,” he said.
Local’s co-chief executive Matt Berg said the fund-through style of transaction was quite common in the UK build to rent market.
“We expect to see more of them in the Australian market as developers with great sites realise the need to deliver a specific type of residential project that is tailored to our customer’s needs,” he said.
“They are significantly more complex than a typical acquisition and certainly require an investment in time and collaboration to ensure you set the right foundations for the project and ensure everyone’s interest is protected along the journey.”
Local was launched in November last year by former Grocon executives Berg and McLennan and say it is “is focused on providing a better and fairer alternative to the current rental market.”
A 500-apartment development in Melbourne's inner west was the first project for the fledgling platform funded by Macquarie Asset Management.
