APG, Local, Novus, Home Seek Steady Growth in Australia’s Evolving BTR Market: MTD TV

Macro tailwinds and a long runway for growth will benefit Australia’s build-to-rent sector as it continues to evolve, according to decision-makers from Dutch pension investor APG Asset Management and BTR players Local Residential, Novus and Home. Watch the full recording>>

The four speakers discussed opportunities in the maturing BTR market Down Under during Thursday’s final session of the Mingtiandi APAC Residential Forum, which is sponsored by Yardi. A chronic housing shortage and steady rental growth are positioning BTR to generate sustainable returns for institutional capital, said Sarah Winbur, a senior portfolio manager for real estate at APG, which looks after the pensions of 4.6 million people and has backed Australian BTR projects by Rent-to-Live Co and US giant Greystar.

As a long-term investor on the lookout for megatrends like demographic drivers and urbanisation, APG expects Australia’s BTR sector to capitalise on strong population growth, low nationwide vacancy rates and policy support from the government, Winbur said.

“So for us it means that we can get an ability to have very long-term stable income, which suits the nature of our capital and what we need to be investing on behalf of,” she told MTD TV.

Birth of an Asset Class

As head of BTR pioneer Home, Christian Grahame oversees more than 1,500 rental apartments in operation and 1,000 under construction. The Melbourne-based company got started seven years ago when it was still “very early doors” for Australia’s rental residential market as a target for institutional capital, whose multi-family exposure at the time was mostly in the northern hemisphere, Grahame said.

“It really wasn’t until around 2017 that the stars aligned, the major global capital players were ready to do pilot projects, if you like. So the first couple of the vehicles were established, and that was really from scratch,” he said. “And so in the seven years since, pretty substantial industry infrastructure has been established.”

Local Residential co-founder and CEO Dan McLennan agreed that institutional involvement in BTR is key from the standpoint of being able to scale up and deliver the best returns.

“The nature of build-to-rent multi-family in Australia is it’s not really a boutique proposition and doesn’t really suit a boutique approach,” said McLennan, whose Macquarie-backed platform has a project pipeline of over 1,600 apartments under management across four sites in Melbourne. “Through having scale, not only do you provide the investment opportunity, but you also get the access to data, the economies of scale in terms of management and buying, all of which sort of converge to create a better quality investment proposition.”

Novus co-founder and CEO Adam Hirst, whose Sydney-based company aims to build homes for 10,000 people in key cities, sees opportunities for differentiation between platforms and product types as BTR expands.

“The build-to-rent market in Australia has formed with a lot of similarities to the student accommodation market,” Hirst said. “And because it is a new asset class, you need to think about design of your buildings better, where you’re locating your buildings better. A different operating model to traditional residential or traditional commercial sectors in Australia.”

On Site in Singapore

Up next in 2025 is the Mingtiandi Singapore Forum on Tuesday 13 May, a chance to connect with fund managers, developers and financiers in-person to discover the best strategies for optimising returns in Asia Pacific.

The fourth annual on-site event at the Conrad Centennial Singapore will bring together leading limited and general partners to explore trends impacting commercial, industrial and living sectors, along with dedicated panel sessions on the Lion City’s role as a global capital hub and opportunities in the Southeast Asia, India and Australia markets.

Since its debut in 2022, the Singapore Forum has welcomed top executives from Oxford Properties, CDPQ, APG Asset Management, Brookfield, PAG and more, attracting over 200 in-person attendees annually and 10,000 video views from industry professionals worldwide.