Gurner Beefs Up Build-to-Sell War Chest

A global institutional investor has deployed $400 million of capital to Gurner’s build-to-sell development platform. 

It takes the fund to $1.75 billion and the total pipeline of current and future projects across its build-to-sell interests to $10 billion. 

Gurner founder Tim Gurner would not disclose the institutional backer but The Urban Developer understands it is an international sovereign wealth fund looking for exposure in the Australian residential real estate market. 

Gurner said the build-to-sell fund would be focused on supporting the build-to-sell projects slated for Melbourne and southeast Queensland, while also seeking inner-city opportunities in Sydney.

The institutional capital raise is a significant step forward in Gurner chief executive Tim Gurner’s 10-year strategy to transform the company from a private Australian property business into an institutional-grade developer and fund manager. 

“This capital raise represents a huge milestone for our business as we continue to drive towards our goal of transforming Gurner Group into a fully diversified capital-light developer, fund manager and lifestyle brand,” Gurner said.

“This gives us huge dry powder now in the build-to-sell sector to focus on opportunities that arise out of the market dislocation that will occur in the next 12 months, specifically in Sydney as we grow our brand there while also supporting our Melbourne and Queensland endeavours.”

Gurner said he believed the short-to-medium term presented opportunities for cashed-up developers. 

“We believe the timing is ideal as the cost of capital and interest rates continue to rise, alongside substantial cost hikes in the construction sector, which we expect will create a lot of opportunities for us.

“We believe the next 6–18 months will be critical as many developers may struggle to hold on to sites due to rising construction and holding costs, which will create serious opportunities for those who have the capital to act quickly,” he said.

“With a lot of dry powder we will continue to actively but carefully pursue new sites across the eastern seaboard of Australia; we are considering a vast range of opportunities that fall anywhere within the $30 million—$200 million land bracket.”

The institutional investment comes off the back of Qualitas and Gurner successfully raising $1.2 billion of equity funding for their build-to-rent platform, after winning cornerstone investment from an undisclosed global sovereign wealth fund.