Union Quarter Spotswood the first privately developed BTR asset to be offered to the market in Australia

8 September 2023

• Union Quarter in Melbourne’s Spotswood is being taken to the market via an International Expressions of Interest campaign run by Knight Frank and Savills on behalf of private family office, the Suleman Group
• The completed mixed-use BTR development comprises 332 apartments with associated retail including a full-line Woolworths, Dan Murphy’s, a medical centre and chemist
• The development, which will be home to over 500 people, is set to become a thriving Neighbourhood Activity Centre with retail and residential accommodation
• Union Quarter is believed to the be the first large scale privately developed BTR asset offered to the market in Australia
• Knight Frank’s recently released Breaking the Shackles – the rise of BTR report found across all regions globally investors are seeking greater exposure to alternative sectors and the residential ‘living’ sectors are at the front of the queue, led by BTR

A completed build-to-rent (BTR) development in Melbourne has been put to market in response to strong buyer demand.

Union Quarter, at 31-69 McLister Street in Melbourne’s inner southwestern suburb of Spotswood, is believed to be the first large scale completed BTR asset to be offered to the market in Australia.

It is being sold via an International Expressions of Interest campaign run by Knight Frank agents Langton McHarg, Stephen Kelly and Tim Holtsbaum in conjunction with Conal Newland and Paul Savitz of Savills.

Union Quarter is a mixed-use BTR development comprising 332 apartments with supplementary retail including a full-line Woolworths, Dan Murphy’s, a medical centre and chemist, together with specialty shops including a plethora of food offerings, a restaurant, and extensive basement parking.

The 332 spacious one, two and three-bedroom apartments are housed in two towers, with 106 apartments in a seven-storey building known as The McLister apartments and 226 apartments in an eight-storey building known as The Hobson Apartments.

The development, which will be home to over 500 people, is set to become a thriving Neighbourhood Activity Centre with retail and residential accommodation, designed by award-winning Baldasso Cortese, and delivered by Hickory Builders.

The residential apartments are expected to set a new standard in Melbourne’s west, with amenity including a co-working business lounge, social dining room, function spaces and communal terraces boasting panoramic views of the Melbourne skyline.

Union Quarter accounts for 16% of all operational BTR units across Melbourne, providing vital residential accommodation and neighbourhood retail to Spotswood, a suburb enjoying incredible gentrification.

With vast convenience right on the doorstep, easy access to public transport and freeways, Union Quarter is located less than 7 kilometres from the Melbourne CBD and near the idyllic Williamstown Beach.

Development Director Zoran Pavlovic said there had been significant buyer interest in Union Quarter for some time, hence why the development was being taken to the market via a formal campaign.

“With a chronic undersupply of rental accommodation in Australia, more build-to-rent projects are needed in Australia, and investor appetite for these assets is strong, both domestically and from overseas capital,” he said.

“Union Quarter is nearing completion, eliminating any development risk for an incoming purchaser in a market where construction costs are escalating, feasibility metrics are tightening for many BTR projects.

“This defensive asset enables investors to enter the tightly-held rental market to take immediate advantage of both income growth and future capital growth and secure an asset below replacement cost.”

Spotswood has a highly competitive and tight rental market, with vacancy at a record low of 1.1% according to SQM Research, and forecast low levels of residential supply will help sustain occupancy and future rental growth.

Recently released research from Knight Frank found after a long gestation period, the BTR sector in Australia had sprung to life, with the quantum of committed and planned development increasing fast.

The Breaking the Shackles – the rise of BTR report found a wave of construction activity was underway, with Melbourne leading the way for BTR developments, making up 45% of the BTR pipeline nationally, with 4,920 apartments under construction and a further 8,250 approved.

Brisbane was next with 27 per cent of the pipeline, with 1,743 under construction and 2,567 approved.

According to the report, across all regions globally investors are seeking greater exposure to alternative sectors and the residential ‘living’ sectors are at the front of the queue, led by BTR.

The research found that for the first time, residential is the most sought-after sector for global investors targeting the Asia-Pacific region, and Melbourne and Sydney are the preferred locations.

The International Expressions of Interest campaign for Union Quarter will close at 3pm (AEST) on Thursday, October 5.