A major build-to-rent operator backed by a fund managed by Macquarie Asset Management Real Estate has secured a site on Bank Street in South Melbourne and plans to deliver 355 rental-only apartments there. The project sits a short walk from St Kilda Road and key transport links, building on the group’s existing $2.5 billion pipeline of residential developments around Melbourne and reinforcing the city’s role as a hotspot for institutional rental housing.
The South Melbourne plan includes a mix of studios and one-, two- and three-bedroom apartments, with around 10% of the building reserved as affordable housing rather than full market-rate rentals. Residents are set to share amenities such as co-working areas, a gym, wellness spaces, a heated pool and a rooftop terrace, which reflects how build-to-rent operators try to justify long-term institutional investment with hotel-style facilities. The site was acquired from a US real estate heavyweight that had previously earmarked it as part of a $1.5 billion national build-to-rent strategy with a large Canadian pension-backed property group.
This will be the developer’s second project in South Melbourne, alongside an existing build-to-rent scheme on Normanby Road due for completion soon, and forms part of a national pipeline worth about $3.25 billion covering roughly 4000 units. The company has also been appointed by the Victorian government to deliver around 350 rentals, including over 100 affordable units, at the Fitzroy Gasworks renewal site in Melbourne’s inner north. That precinct is a former industrial area now being turned into a mixed-use community with housing, sports facilities, education spaces and public areas.
Across the wider market, Melbourne appears to be cementing its status as the country’s build-to-rent hub, helped by comparatively lower land costs that make large-scale rental developments more feasible. Other global and local players are backing similar projects, with a global construction and development group recently securing support from a Tokyo-listed property company for a $500 million Docklands tower and a consortium of Japanese corporates working with an Australian investment house on a separate $600 million scheme in the same precinct. Beyond Victoria, the Macquarie-backed operator has taken over management of a 1252-apartment community on the Gold Coast owned by a Middle Eastern sovereign investor, widely viewed as Australia’s largest build-to-rent asset. Even with these projects coming through, institutional landlords argue that build-to-rent still makes up a relatively small share of the overall rental market and suggest that this wave of projects may be only the beginning rather than a sign of looming oversupply.
