Tokyo Tatemono Buying Minority Stake in $327M Lendlease BTR Project in Melbourne

Japanese real estate group Tokyo Tatemono is buying a stake in Lendlease’s A$500 million ($327 million) build-to-rent project under construction in central Melbourne.

The TSE-listed firm will acquire the minority equity interest in 899 Collins Street, a waterfront development in the Docklands district, from Lendlease, which is developing the 499-unit complex in partnership with Japan’s Nippon Steel Kowa Real Estate, the companies said Monday in a release.

Lendlease is the developer, builder and investment manager for the 24-storey project, with completion scheduled for early 2027. The venture marks Tokyo Tatemono’s first BTR play and second residential investment overall in Australia, following a partnership announced earlier this year on a luxury condo project in Sydney.

“Welcoming a highly aligned partner in Tokyo Tatemono to the project reflects the strength of our shared vision and growing confidence in the sector,” said Tom Mackellar, CEO of development at Lendlease. “It also highlights the strength of our network of international partners and continued demand for high-quality opportunities across our development pipeline.”

On the Waterfront

Launched last year, 899 Collins occupies a wedge-shaped plot in Lendlease’s Victoria Harbour precinct on the western edge of downtown Melbourne. The development will offer a mix of studio, one-, two- and three-bedroom apartments with Yarra River views as part of Lendlease’s pipeline of over 2,300 new homes in Docklands.

Lendlease is selling an unspecified slice of its interest in 899 Collins as the ASX-listed builder and fund manager continues to offload balance-sheet assets under a business overhaul announced last year.

Sydney-based Lendlease’s A$2.5 billion in capital recycling initiatives during fiscal 2025 have included the sale of its Capella Capital infrastructure arm to Japan’s Sojitz Corporation for A$235 million, the disposal of a A$170 million half-stake in its Asia life sciences unit to private equity giant Warburg Pincus in a deal closed in July of last year, and a A$516 million exit from its US military housing business.

Hong Kong’s Link REIT confirmed in November that it had submitted an offer to acquire half-stakes in three Australian malls held by a Lendlease-managed fund, but a binding agreement has yet to be signed. 

Upping Aussie Bets

Lendlease’s first partnership with Tokyo Tatemono comes after the Japanese firm invested in Alex & Willow, a collection of luxury homes under development in the Crows Nest suburb of Sydney’s North Shore, in a deal announced in January. The project of local players Perifa, Versatile, Nettleton Tribe and Richards Stanisich will feature 25 two- and three-bedroom condo units, with delivery to buyers expected by early 2027.

Tokyo Tatemono previously hooked up with Nippon Steel Kowa Real Estate on a redevelopment project in Tokyo’s Edogawa ward totalling 119,000 square metres (1.2 million square feet) of gross floor area. Upon completion in 2030, the project will feature government and private offices and 400 residential units.

“Our collaboration with NSKRE has already proven successful in Japan, and we are pleased to extend this trusted partnership to the Melbourne market,” said Fumio Tajima, head of overseas business at Tokyo Tatemono.