With the ink barely dry on the Managed Investment Trust legislation reforms of last year, institutional investors are making moves in Australia’s build-to-rent sector. Local has snapped up a prized Southbank site for a $270-million development in one of the first major transactions since the policy changes, which were designed to stimulate institutional investment in rental housing. Local head of investments Chris Axsentieff said the MIT Legislation “levels the playing field for residential development in Australia, bringing the taxation rate for MITs [Managed Investment Trust] in line with PBSA and commercial assets”. “It’s also a clear signal to the international market that government believes in build-to-rent, which some investors have been waiting to see,” Axsentieff told The Urban Developer . The project at 65 Haig Street in Melbourne’s Southbank would deliver 312 residences and boost Local’s total asset pipeline beyond $1.34 billion. The deal structure means Local will develop the site while original developer Samma Property Group remains as landowner. This arrangement “will allow us to leverage Samma’s experience on the site and is an example of how Local is tailoring unique solutions to each individual project,” Axsentieff said. “Local will deliver and manage the development, bringing it to market as quickly as possible to create much needed apartment supply.” The site of the planned 39-storey tower is on the CBD fringe, 200m from public transport and 500m from South Melbourne Market. Construction is scheduled to begin in the third quarter of this year and completion is targeted for late 2027. Axsentieff said the project would “spur the kind of institutional investment that the recent legislative changes seek to encourage”. While the MIT legislation represents significant progress, Axsentieff said more can be done to motivate further investment in the sector. “Australia and Victoria remain a highly regulated and heavily taxed environment,” he said. “Better understanding and recognition of sector, more efficient planning and design pathways and a sector specific approach to GST will all help to attract investment and see build-to-rent play a more meaningful role in delivering housing.” ▲ A render of the proposed development, designed by Fender Katsalidis. Planned for the development is 1250sq m of resident amenities that includes co-working spaces, health and wellness facilities, an indoor heated pool, sauna and steam rooms, gym, rooftop lounge, private dining area, entertainment spaces and pet facilities. The development does not have car parking, reducing building costs and aligning with urban living preferences, the developer said. Local is currently in design development with Fender Katsalidis to progress the endorsed design, optimising it to meet the lifestyle needs and expectations of the rental market, Axsentieff said. The project targets an undersupplied rental sector in the Melbourne market—74 per cent of apartments will be configured as studios and one-bedroom units aimed at singles and couples. Local said it was committed to affordable and social housing, maintaining a baseline rule that 10 per cent of its projects be allocated to what it calls “impact housing”—a mix of social, affordable and specialist disability accommodation. Axsentieff said the requirement for 10 per cent affordable housing in the MIT legislation was also a “strong endorsement of Local’s approach to Affordable and Impact Housing, which has formed part of our business since our first project”. As one of the 2 per cent of property developers globally who are a Certified B Corporation, Local is maintaining high sustainability standards throughout the project, Axsentieff said. Delete The development is designed to 5 Star Green Star Design & Built standards, and the company is exploring opportunities to reach 6 Stars and targeting a 7.5 star average NatHers rating, similar to that achieved with its $380-million Local: Kensington project . Axsentieff said these sustainability commitments reflected Local’s broader philosophy of creating value-driven housing options that appeal to renters who increasingly prioritise environmentally responsible living. The Southbank site was earmarked for a conversion to 100 per cent affordable housing under a previous amendment application. The site was purchased by Samma through its SDJ Property Twenty Second company for $12.5 million in 2020-2021. Also this week, an a separate transaction, Bensons Property Group acquired another Samma site at Docklands for just over $20 million. The 4509sq m Lorimer Street property, which comes with approval for a 31-storey residential tower, is Bensons’ first major move since exiting voluntary administration this month.
