Rich list developer Tim Gurner and real estate financier Qualitas have secured a $2 billion capital injection from an offshore institutional investor to drive the growth of their build-to-rent platform, as they look to expand its presence in Sydney.
The blockbuster raising for the second fund under the GQ Multifamily Build-to-Rent platform follows the joint venture partners securing $1.2 billion of equity investments for the first fund, including a cornerstone backing from a sovereign wealth fund.
A $3.4 billion partnership: (L_R) Qualitas co-founder Mark Fischer, Tim Gurner and Qualitas co-head of equity strategies Rohan Davis.
Most of this initial capital has already been committed to four BTR projects – three in Melbourne and one in Sydney – that are either under construction or close to starting and that will yield over 1400 apartments once complete.
Mr Gurner, who last year secured $400 million from Singaporean sovereign wealth fund GIC, to grow his east coast build-to-sell apartment business, would not disclose the identity of the new $2 billion BTR investor, but confirmed there was no Australian money involved.
Offshore institutional investors, who already have stakes in Australian BTR projects include US private equity giant Blackstone, which this month flagged further investment in Australia, and GIC, which is backing Grocon scion Daniel Grollo’s $2 billion Home BTR platform.
“We now have a large amount of capital to do something special,” Mr Gurner told The Australian Financial Review.
While not specifically focused on one Sydney, Mr Gurner said he was keen to do a lot more in Sydney, provided development site values started to fall.
“We believe that all capital cities, but Sydney especially will experience a 15-20 per cent correction in land price in the coming 12 months, so we will be ready to jump on any opportunities that arise,” he said.
With $3.2 billion raised across the two BTR funds creating a future pipeline of 3500 rental apartments, the GQ platform is on track to achieving its goal of having 5000 apartments worth $5 billion under management by 2026.
ASX-listed Qualitas, which will report its half-year results on Wednesday, has launched a fund providing both equity and debt to the fast-expanding BTR sector. In August, Qualitas secured a $700 million investment mandate from the Abu Dhabi Investment Authority to grow its developer lending business.
Global head of real estate and co-founder Mark Fischer said the fund manager saw “huge opportunity for the build-to-rent market in Australia” given institutional ownership of rental units is as high as 11 per cent in the US, but only just taking off locally.
“Our ambition is to be a dominant player in the Australian build-to-rent market and with this latest investment, we are on our way to achieving this,” Mr Fischer said.
Amid an ongoing rental crisis driven by record low vacancy rates in the capital city markets, apartments developed by Gurner-Qualitas won’t be at the affordable end of the market, but will instead be targeted at young professionals wanting to rent luxury, inner-city accommodation with a plethora of amenities.
Render of the 61-level tower in Parramatta that Tim Gurner and Qualitas will develop.
In Melbourne, two BTR projects – one in St Kilda with 297 apartments, and another in Southbank with 394 apartments – are already under construction, while a 391-unit development in Parramatta is due to commence construction in the second quarter of the year.
In Melbourne’s inner north, demolition works will soon begin on a 333-unit development.
The first of these projects – Beach House in St Kilda – is due to be completed next year.
Follow the topics, people and companies that matter to you.
Fetching latest articles
The Daily Habit of Successful People
02 8005 6525
info@aktengineering.com.au
Recent Comments