Customer and capital appetite accelerate for Build-To-Rent in the nation’s capital

The ‘Build to Rent’ (BTR) opportunity is rapidly growing to prominence in Canberra, as assets provide an attractive value proposition because of the city’s transient population, white-collar workforce and strong economic and credit fundamentals.

Despite Covid-19 impacts, in 2020-2021, ACT’s real Gross State Product increased by 2.8% – well above the National Growth rate of 1.5% over the same period.

The ACT has one of the strongest long-term economic growth outlooks, which will be supported by the projected growth of the public sector as well as investment into infrastructure projects. Furthermore, the ACT is forecast to have the strongest population growth over the 10 years to 2031 when compared to other global cities in OECD nations.

JLL’s Managing Director – ACT, Tim Mutton said, “As the seat of Australian Government, Canberra is relatively insulated from the changing economic situation we are seeing more broadly. This relative safety is attractive to investors, and coupled with our positive economic story locally, tight vacancy rates and very controlled supply pipelines, Canberra is presenting compelling value on a risk adjusted basis.”

As Australia’s capital, 38% of the Commonwealth of Australia’s workforce is situated in Canberra. JLL analysis shows 8.2% apartment rental growth in Greater Canberra over the past 12 months (through Apr-22) with a vacancy rate of 1.09% (Jun-22).

BTR has emerged in Canberra as a key element of a broader move towards alternative investment strategies for large-scale investors to create viable investments in multi-unit housing schemes that will help to fill the rental market gap.

JLL’s Alternative Investments – Australia, Senior Director David Hill said, “Canberra has a particularly transient workforce of high-income earners underpinned by public sector employment, consulting and supporting services which makes it a prime market for build to rent. With residential vacancy rates of around 1% and a rental population of 38% versus 30% nationally, we expect Canberra to be a key focus for the national BTR players.”

JLL has been exclusively appointed to sell 100 Northbourne Avenue, Canberra – an operational 153-apartment building located on the gateway to Canberra’s CBD. The asset presents a prime opportunity to reposition to a build to rent asset and take advantage of the strong market fundamentals driving rental growth in Canberra.   

100 Northbourne presents a unique opportunity to enter Canberra’s institutional residential market through a completed asset, bypassing rising construction costs with current improvements estimated at $65 million.

The professionally managed institutional rental sector offers a long term, stabilised income stream in a needs-based asset class.

International Expressions-of-Interest for 100 Northbourne Avenue close on 27 September 2022 at 2pm (AEST).