An amalgamated site of 42 units across four apartment blocks has sold in Bankstown to a leading community housing provider.
The $16.968 million deal to City West Housing was brokered by the Colliers team of Harry Bui, Nick Estephen and Thomas Mosca on behalf of a private investor.
An increasingly unaffordable housing market coupled with tax and planning reform are increasing demand for the affordable build-to-rent (BTR) sector, with some campaigns dominated by interest from these operators.
“Suitable sites for build-to-rent remain challenging to identify, but investors have recognised the sector as an emerging market and are positioning to look for alternative investment options such as older-style whole apartment blocks.” Said Harry Bui, National Director of Colliers
The sale represents value of $404,000 per apartment, with this one of the largest apartment blocks sold in-one-line in Western Sydney over the past five years.
The recently released Colliers Global Capital Markets 2022 Investor Outlook highlights multifamily/BTR as one of the top three asset classes that those surveyed would invest in next year. In fact, 34 per cent of respondents said they would target the sector, with a big focus on Australian markets.
According to Colliers’ Build to Rent Report 2021, nationally there are 3,013 purpose-built BTR units currently under construction across 11 projects, all due for completion in 2022. Looking ahead, there are five BTR projects under construction that will deliver 1,365 units in 2023 and two DA approved projects expected to deliver a further 557 units the same year.
“We are seeing global institutional investors increasingly allocating capital to investment strategies supported by these build-to-rent themes,” Mr Bui said. “Across Australia, we are anticipating strong and growing demand for high-quality build-to-rent assets as population growth and declining home ownership drive the need for quality rental stock.”
“Build-to-rent, at its heart, is a very long-term investment model and is well supported by institutional investors from both domestic and international capital looking for homes to invest.”
Located at 30-34 Sir Joseph Banks Street, the site has a total area of 4,294sqm and comes with a fully leased gross rent of $787,280 per annum.
Three of the blocks have 12 units in them and were built in 1984, while the fourth has six units and was constructed in 2006.
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