Novus Pads Out Pipeline to $1bn in Melbourne Acquisition

Build-to-rent specialist Novus has expanded its holdings in Melbourne, acquiring a multi-level carpark with approval for a 214-apartment development. 

Wuzhong International has shelved its plans for a $160-million, 18-level apartment development called Bowen & Queens in South Melbourne, selling off the asset for an undisclosed sum. 

According to RP Data, the property last changed hands in 2007 for more than $12 million.

Novus co-founder Adam Hirst said they would modify the existing 18-storey build-to-sell plans to create a build-to-rent offering and that amended plans for Novus on Bowen would be submitted to the City of Port Phillip Council. 

Novus on Bowen has been acquired on balance sheet and will be used as a seed asset for Novus’s second build-to-rent investment vehicle following the success of its initial fund with M&G Real Estate, the Novus Build-to-Rent Trust.

Hirst said the build-to-rent asset would comprise 212 apartments and a wellness-based communal amenities offering, targeting a 7-star NatHERS rating with an all electric building powered by renewable energy. 

“The tailwinds driving the growth of the build-to-rent sector in Australia continue to grow with increasing government support for the sector and record low vacancy rates,” Hirst said.

“Projects such as Novus on Bowen highlight the important role the sector can play by activating previously dormant planning approvals and adding much needed supply into the market. 

“As a local specialist, we have a clear vision and value proposition for build-to-rent in Australia and Novus on Bowen demonstrates the continued rollout of this proposition.”

▲ Novus co-founder Adam Hirst recently spoke at The Urban Developer’s Residential Developer Summit in Sydney on the rise of build-to-rent.

Novus is expanding its pipeline with one Melbourne project already under way, and two in Sydney in planning phase at Parramatta and Chatswood. 

Further projects are in due diligence across Sydney, Melbourne and Brisbane, according to co-founder Jason Goldsworthy.

“It is extremely rare to be able to acquire projects of this calibre with existing development approvals in place,” Goldsworthy said.

“The existing location already benefits from proximity to Melbourne CBD, adjacency to both the Botanical Gardens and Albert Park and fantastic surrounding amenity. The existing local amenity is being further enhanced through the completion of Anzac Metro Station making this one of the most connected locations in Melbourne. 

“These fundamentals align perfectly with our mid-scale convenience-based build-to-rent model.”

Goldsworthy said strong population growth in concert with strong rental demand and a structural undersupply of apartments was compelling for long-term build-to-rent investors. 

Construction on Novus on Bowen is due to start in early 2024.