Australian Retirement Trust Buying 48.5% Stake in $1.1B Mirvac BTR Fund

Sydney-based fund manager Mirvac has a new partner in its build-to-rent strategy with superannuation fund Australian Retirement Trust having agreed to buy a 48.5 percent in its A$1.7 billion ($1.1 billion) Liv Mirvac Fund, according to statements by the two parties this past week. 

ART is buying its near-half holding in the Liv strategy from Japan’s Mitsubishi Estate, according to sources familiar with the transaction who spoke with Mingtiandi, with the deal taking place after Mirvac had brought online a number of apartment projects under the strategy.

“This is a particularly appealing investment opportunity because the LIV Mirvac Fund provides ART immediate access to five operational properties across Australia, including at Newstead in Brisbane, Olympic Park in Sydney, and the CBD and Brunswick in Melbourne,” Michael Weaver, general manager for mid-risk assets and the UK at ART said in a statement. 

The investment is the first commitment to a BTR portfolio in Australia for ART, with the rising rents fuelled by the country’s housing crisis having attracted major investors to the sector this year, including Japan’s Tokyo Tatemono buying a minority stake in a Melbourne BTR project from Lendlease in a deal announced at the beginning of this month. 

Portfolio Goes Operational

Mirvac’s latest BTR milestone comes after the company made its first major venture in the sector in 2018, teaming up with Australia’s Clean Energy Finance Corporation (CEFC) for a strategy seeded with what would later become LIV Indigo at the fund manager’s Pavilions project at Sydney Olympic Park. 

With two projects then operational (Liv Indigo and Liv Munro in Melbourne) plus another three in the pipeline, Mirvac established the Liv Mirvac Fund in June 2023, Mitsubishi Estate investing at that time. 

Now that the partners have five operational locations in the BTR venture, Mitsubishi Estate, which joined Mirvac in an A$2 billion commercial project at Sydney’s Darling Harbour in September, is achieving an exit after around two and a half years, with Mirvac pointing to the venture’s growing scale as making it appealing to investors. 

“Following the completion of LIV Anura in Brisbane and LIV Albert in Melbourne this year, LIV Mirvac is the largest operational build to rent portfolio and platform in Australia, with around 2,200 apartments developed by Mirvac, and a clear strategy to grow this to at least 5,000 apartments in the medium term,” Mirvac Group CEO and managing director Campbell Hanan said in a statement. 

The BTR partnership comes after ART in 2023 took a 49 percent stake in Mirvac Industrial Venture, an A$370 billion strategy seeded with a logistics park in Auburn, New South Wales. ART has also invested in a pair of Mirvac industrial projects in the Sydney area and Mirvac also manages ART’s A$800 million direct property portfolio.

“Our previous partnerships with Mirvac on a number of successful projects underpin our confidence given their track record and professionalism on developments like this,” ART’s Weaver said.

BTR Investments on the Rise

ART, which has previously invested in rental residential in the US, is backing Mirvac’s BTR strategy as more investors look to the sector for long-term returns.

In September France’s AXA IM Alts announced that it was adding a Melbourne project to its existing rental housing strategy in Australia, adding 105-units to its pipeline.

In August, regional rental housing platform Weave announced its acquisition of a Sydney project as an initial investment in a $300 million Australian venture, and in July, Sydney-based BTR operator Novus said that it had received backing from Japan’s Kanden Realty and Development for a 190-unit BTR project in Melbourne.