GURNER™ and Qualitas have confirmed the successful fund raising close of $1.2 billion for their GQ Build-to-Rent platform, far exceeding the original $1billion they set out to raise.
The group’s international capital raise was oversubscribed and the capital was cornerstoned by a global institutional investor alongside co-investment from both Qualitas and GURNER™.
The $1.2 billion in firepower will fast-track the construction of 1,700 apartments already under the group’s control and fund the acquisition of further build-to-rent assets with a focus on Sydney, Melbourne and Brisbane, with the objective to surpass 5,000 apartments within years given the joint venture’s existing holdings.
The first seed site to launch under the platform will be the recently announced $450 million, 385-residence project at 12 Hassall Street in Parramatta that GURNER™ and Qualitas acquired this month; the 2,049sqm site will yield 61 levels and likely include 4,000sqm of retail and commercial space, premium amenity and a rooftop facility once complete.
The platform’s fully-funded status joins only a handful of local build-to-rent providers who have successfully raised capital, placing GQ in an enviable position to lead the sector and continue to grow the platform.
With the strategic partnership formed over 12 months ago, GQ represents the first time a market-leading Australian investment manager has partnered with an established design focussed Australian developer to enter the build-to-rent arena, bringing together two industry heavyweights with unparalleled local experience.
Combining leading investment management and entrepreneurial development capability, the platform’s competitive edge is its creative deal structuring and off-market origination capabilities.
GQ’s aim is to create a portfolio of $5billion and over 5,000 units under management in the coming years, with a focus on quality returns, premium sites in prime locations and a product that GURNER™ is synonymous for backed by Qualitas’ deep network of global investors.
Tim Gurner said “It is humbling to have witnessed such an overwhelming response to our capital raise, which became oversubscribed in such a short period of time.“ The capital markets for build-to-rent right now are extremely competitive, and being able to secure this funding against such competition to launch our platform is very exciting.
“ With majority of the capital now allocated we will soon be commencing another round of capital raising in the coming months as we look to aggressively grow the size of the fund, and as we prepare to commence construction across various projects in the next 12 months.
“ We have an ambitious plan for what we want to achieve in the build-to-rent space, and look forward to focusing on delivering a product that will provide a genuine point of difference to the sector. We will be delivering product reflective of our intrinsic focus – aspirational, market-leading luxury residences, in prime locations that foster sought-after lifestyles.“ Our buildings will be targeting residents who want the service and amenity of a five-star hotel, alongside the comfort and security of a luxury home.
“ We are now heavily focused on the Sydney market in particular for further sites to build the portfolio. With market penetration across the eastern seaboard we can create the largest and most sought-after platform in Australia, which is certainly our ambition. “ 12 months ago we set up an office in Double Bay in Sydney to ensure we can own a large portion of that market in both Build To Rent and Build To Sell as we continue to diversify across Australia.
“ Sydney is our main focus now given the very large portfolio of over $10billion we have in both Victoria and Queensland.”
Qualitas global head of real estate and co-founder Mark Fischer said, “ The overwhelming response to this capital raising reinforces our belief in the future of the build-to-rent sector. 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.“ The scale of our debut capital raising in the build-to-rent sector and its support from blue- chip institutions is vindication of our decision to pursue a fully vertically integrated model for BTR.
“ We had conviction when setting up the platform that having control of assets to launch a capital raise was pivotal. The momentum we have in prudently deploying the capital we have raised means that we expect to be in the market on a second fund raising early next year.
“ The build-to-rent sector is perfectly aligned to our focus on assets generating defensive and resilient cashflows and we are seeing global institutional investors increasingly allocating capital to investment strategies supported by these themes.”