Private investor and fresh flower mogul Sam Suleman is forging ahead with a $275 million build-to-rent project at a two-hectare landholding in Spotswood in Melbourne’s inner west.
The Union Quarter project, tipped to be one of Australia’s largest privately developed build-to-rent projects when complete, has secured stage one funding approval from ANZ with construction under way on site.
The mixed-use precinct, located between 31-69 McLister Street, is set to comprise 300 apartments and an additional 34 dwellings dedicated for specialised disability accommodation.
The Suleman Group, which will retain ownership of the project, has now awarded Melbourne builder ABD Group the project’s construction contract, estimated to be worth $140 million.
The project, which is earmarked to reach completion in early to mid-2022, will create 550 jobs while under construction, and a further 471 ongoing jobs on completion, adding approximately $45.3 m in value to the Victorian economy once operational.
The project’s first stage will see the delivery of a neighbourhood activity centre, 4,200sq m Woolworths supermarket, Dan Murphy’s, 1,100sq m medical, health and fitness tenancies and other specialty retailers as well as a town square.
The Suleman Group, the development arm and family office of the Suleman family, has held the site in the gentrifying former industrial suburb for two decades.
A final smaller lot was acquired in 2014 for $1.2 million with a permit secured at VCAT in 2017.
Suleman managing director Sam Suleman said the decision for the family to move forward with its vision had been driven by underlying housing demand fundamentals and a rapid rise in demand for quality residential dwellings in the area.
“We are acutely aware that with the a lack of project commencements in the coming year, commencing construction of a build-to-rent precinct as a countercyclical development play means we will be ready to deliver much-needed new accommodation to the rental market by 2022 and beyond.”
Build-to-rent developments, designed for renting professionally-managed apartments on a long-term basis, are now serving as an appropriate response to dragging housing affordability, rising unemployment and falling consumer confidence.
During recent years Mirvac has spearheaded Australia’s push into the emerging institutional asset class.
The developer launched its $1 billion Australian Build-to-Rent Club in July of 2018 and by 2023 will have a total of 1,600 build-to-rent apartments.
Mirvac, in collaboration with Milieu, is progressing a project in Brunswick in Melbourne’s inner north which is scheduled for completion in late 2024.
Construction of Mirvac’s Melbourne build-to-rent project at Queen Victoria Markets is also under way.
Greystar, whose parent company is the biggest operator of apartments in the US, holds two adjoining sites in Melbourne’s South Yarra, set to be turned into a mixed-use precinct with more than 500 build-to-rent apartments by 2023.
And Melbourne developer Assemble is pressing ahead with its second build-to-rent development at Kensington in the city’s inner-north, offering residents the option to buy their apartment at the end of a five-year rental period.