Mirvac Monopoly: BtR Pioneer Plots East Coast Domination

Five years after opening Australia’s first large-scale build-to-rent property, Mirvac hopes its head start will give it the edge as international giants circle the sector here. LIV Albert, Mirvac’s latest 498-apartment project, in Melbourne’s Brunswick, has an 8.2-star Nationwide House Energy Rating Scheme certification—the highest energy performance the company has achieved. Even more significant than the technical milestone is what the $330-million development represents—the latest stage in Mirvac’s ambitious build-to-rent strategy and its rapid expansion across Australia’s eastern seaboard. Mirvac completed more than 890 build-to-rent apartments this year and has a pipeline of 2200 apartments. The target is 5000 apartments in the medium term—which would cement the company’s position as the biggest Australian-owned operator in New South Wales, Victoria and Queensland, and potentially the largest in the build-to-rent sector nationally. Angela Buckley, who steers Mirvac’s build-to-rent operations, says now is the time to go for market dominance before competition intensifies. And there’s plenty of opportunity on the boards. Buckley said there was no reason for the sector not to become 3 to 4 per cent of the total housing market, making it “significantly the biggest asset class in the country”. Mirvac group chief executive Campbell Hanan says the company’s tri-state strategy creates competitive separation. “LIV Mirvac is the first in Australia to operate built-to-rent properties across New South Wales, Victoria and Queensland, demonstrating our market-leading position and ability to deliver,” Hanan says. ▲ Mirvac group chief executive officer Campbell Hanan and Mirvac general manager, build-to-rent, Angela Buckley. First-mover advantage has delivered solid results. Three of Mirvac’s assets now operate above 95 per cent occupancy with about 3300 residents across the portfolio. And LIV Anura in Brisbane ( pictured top and below ), launched just six weeks before the Brunswick opening, has shown strong leasing momentum despite Queensland being the newest and least developed build-to-rent market of the three states. Mirvac’s success hinges on geographic precision rather than blanket expansion, Buckley says. “Real estate is hyper-local and that difference between understanding not just the city, but the market, the sub-market, and how customer needs and expectations change across each of the cities, is really important,” she says. The focus remains on central business districts and inner-city locations where renter concentrations run highest. “It’s a city-by-city experience, but there’s a lot of really good fundamentals across each of those cities, which is why we’re striving to be in them,” Buckley says. “There are some key differences that are driving different levels of supply in each of those markets, whether that’s land value in Sydney or planning differences in each of the states, and of course availability and ease of delivery in construction as well.” LIV Albert’s focus on sustainability tests the theory that it adds to renter appeal and drives commercial returns. The all-electric development features 100 per cent renewable electricity via an embedded network, double-glazed windows, solar panels and rainwater harvesting. Two-bedroom apartments deliver annual energy bill savings of up to $700 compared to buildings meeting base National Construction Code compliance—a financial benefit that appeals to cost-conscious renters. Delete Buckley says the Brunswick location demanded that approach. “ESG is a key priority to us, but we also really have learned in the last five years it’s becoming far more important to consumers as well,” she says. “This is an area particularly where that is very important to that customer base and delivering the most energy-efficient and sustainable building seemed like a great target for us to aim for. “There might be a slightly higher upfront financial cost, but when we look at the life cycle cost overall, especially any cost savings to customers, that just makes good commercial sense.” She says Mirvac’s approach is setting benchmarks for the broader sector. “We recognise that there’s different standards across the industry when it comes to ESG,” Buckley says. “But our vision is really to set the standards that others can follow, and in doing that, we hope to make a higher overall impact.” The sustainability focus extends beyond environmental credentials to commercial strategy. While some developers have publicly questioned whether build-to-rent returns justify the capital required, Buckley argues that “the returns, especially on a relative basis, are very compelling.” “It’s about being able to deliver good, far more consistent income” with lower risk compared to other asset classes requiring significant capital expenditure. Mirvac’s integrated model—across design, development, construction and operations—means it controls the development process from go to whoa, an advantage pure-play operators can’t replicate. The company can identify potential build-to-rent sites from its $30-billion development pipeline, design and construct the buildings through its own teams, then manage them long-term. ▲ Mirvac’s integrated model enables faster decision-making across design, construction and operations. This captures margins at every stage and enables faster decision-making than operators relying on external contractors. The Brunswick development ( pictured below ) comprises 15 affordable housing apartments at 30 per cent below market rates through partnership with National Affordable Housing. Residents can access more than 2400sq m of shared amenities including gym, co-working areas, private dining rooms, a maker’s workshop and communal vegetable garden. The campus-style project, designed by Fieldwork and Breathe, connects to Clifton Park through two new laneways that integrate the development into Brunswick’s existing fabric. Buckley says the collaborative design approach was crucial to project success. “Making sure that we are working with the right consultants and bringing that expertise to the table, constantly testing new ideas, iterating, changing, pivoting—that really was the approach here,” she says. “Both to delivering a sustainable building, but also that important lifestyle for customers going forward.” Buckley says build-to-rent offers the ideal vehicle for combining market and affordable housing. “Because you’ve got a single owner and manager and you’ve got a long-term investment, you can deliver that in a way that is completely one community and without any difference in apartments or access to amenities or any of the other benefits that we might offer,” she says. She says that mixing tenures creates stronger communities that are “no different to our workplaces or our friendship groups”. “When you bring diversity to the table, you just create better outcomes, and I think the same is true for communities as well. We can all learn so much from people that have different backgrounds or different life experiences and we’re richer for it.” Delete While changing renter perceptions remains crucial to long-term viability, Buckley acknowledges the starting point is low. “Overwhelmingly the feedback we have from our customers is that renting hasn’t been a great experience for them, and so the bar hasn’t been set very high in terms of expectations,” she says. “We’re really working hard to try to surprise and go beyond customers’ expectations.” Flexible leases and personalisation options—features that differentiate build-to-rent from traditional rental arrangements—address customer feedback accumulated over five years of operations. “We want our customers to feel proud that they’re renting, to be in an environment where there are a lot of housing choices,” she says. “We recognise that some people are renting by necessity and that’s more common today. We want to make it a better, more bespoke living experience.” Mirvac’s operational model has attracted institutional capital despite broader market hesitation. Offshore investors provide the largest contribution to the sector, according to Buckley. “These are investors that are very familiar with the model in other markets and can see demographically how Australia is trending and the shortage of housing,” she says. Domestic superannuation funds are showing increasing interest, particularly if regulatory changes to ASIC’s Regulatory Guide 97 (RG 97) materialise. RG97 governs how superannuation funds disclose fees and costs, but its current treatment of stamp duty as an investment “fee” discourages institutional investment in Australian property, including build-to-rent housing. ASIC is reviewing these regulations, where a change to stamp duty reporting requirements could unlock $10 billion in capital and, according to The Property Council of Australia, “up to 35,000 additional new homes for Australians to own and rent over the next five years, at zero cost to government”. ▲ LIV Indigo was Mirvac’s and Australia’s first large-scale built-to-rent property, which opened in 2020. Government policy settings are critical to flow. Some federal and state tax concessions have created more favourable conditions for build-to-rent compared to other asset classes, though Buckley says more work remains. Buckley says Mirvac is by-and-large pleased with reforms to sector regulations made by state and federal governments. &ldquo;We&rsquo;re really pleased with what generally speaking state and more recently the federal government, the changes that have been made,&rdquo; she says. --> “A lot of the tax concessions that have been put in place were about taking build-to-rent from what was a very much a disadvantage from other asset classes into a more equitable playing field,” Buckley says. “Streamlining to foreign investment applications would really actually inject additional capital into the sector generally and, obviously with that, we would see supply and more housing solutions to follow.” LIV Albert joins LIV Indigo in Sydney, LIV Munro and LIV Aston in Melbourne, and LIV Anura in Brisbane. Each property operates under unified branding and service standards—an approach that creates operational leverage as the portfolio expands. Buckley says that while the sector’s evolution will benefit from multiple operators raising standards collectively, Mirvac still enjoys a unique market position. “There’s a growing number of operators and they’re all committed to delivering great customer outcomes,” she says. “I’m very proud of what Mirvac does, but also to see the whole sector doing that, I think is ultimately what will really start to shift perceptions.” “I think we are quite privileged to be able to be genuinely operating across Sydney, Melbourne and Brisbane. It has always been our vision to be able to scale the model nationally as well.” Mirvac’s integrated approach to development gives the company an edge over international competitors trying to establish comparable scale. “[We can] take advantage of opportunities that others may not even see coming,” Buckley says.

Mirvac Monopoly: BtR Pioneer Plots East Coast Domination

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