Singapore property heavyweight City Developments Ltd (CDL) has officially entered Australia’s build-to-rent (BTR) residential sector with a pair of development projects set to break ground in the second half of this year.
CDL Australia will begin construction on a rental housing complex in Toowong, a suburb of Brisbane and another BTR project in Southbank, south of Melbourne’s central business district, in the next few months. These developments set up the local division of the Singapore-based real estate group to deliver a pipeline of 560 apartment units by as early as 2025.
“The group is very positive about the future of the build-to-rent sector in Australia,” Cameron Laird, head of development for CDL Australia, said in a statement this week. “We are extremely pleased with the strong foothold we have gained since our re-entry into the Australian property sector in 2015 and the opportunity to leverage the rising demand for rental accommodation with build-to-rent projects in Brisbane and Melbourne.”
CDL is joining a flurry of regional and global players betting on Australia’s rental housing sector, with the announcement coming on the same day that the principals of Scape Australia revealed a A$1.5 billion ($980 million) joint venture with Dutch fund managers APG and Bouwinvest aimed at developing and acquiring BTR projects in the continent’s major cities.
In Brisbane, CDL is preparing to build a 320-unit apartment complex at 58 High Street, about four kilometres (2.5 miles) west of the city’s central business district, with completion slated for the first quarter of 2026.
The 24,564 square metre (264,400 square foot) project occupies a 1,571 square metre site which CDL purchased last year for A$12 million ($7.85 million), based on its annual report.
In Melbourne, the firm is set to build 240 apartments in a 27,000 square metre development at 203-205 Normanby Road, located within the Fishermans Bend urban renewal precinct about two kilometres away from the central business district.
The project, to be built on a 1,222-square-metre site CDL purchased last year for A$11.1 million, is targeted for completion by the third quarter of 2025.
CDL is replenishing its pipeline of projects after completing a 198-unit apartment and retail project in western Melbourne last year, with more developments underway.
In Brisbane’s Alderley area, CDL has broken ground on the first phase of its Brickworks Park project, which will yield 215 apartments and townhouses with resort-style amenities. Construction is also ongoing for its 96-unit Treetops luxury townhouse project in Kenmore, a residential suburb southwest of central Brisbane.
Developed jointly with local partner Metro Property Development, the first phase of the Treetops project has already sold-out with buyers having snapped up 60 percent of the units in the second phase.
The Singapore heavyweight has been ramping up its presence overseas to diversify beyond its home market, after its latest financial results showed CDL’s home sales in Singapore plunged 55 percent year on year during the first quarter to 88 units worth S$213.2 million ($158 million).
In addition to its multi-family investments, in March, the group bought the Sofitel Brisbane Central hotel in Brisbane for A$177.7 million and during the same month completed its £395 million (then $468.2 million) purchase of St Katharine Docks in central London from Blackstone.
CDL’s venture into the Australian BTR market adds to the influx of foreign investments from global players over the past year as investors bet on the long-term growth of the rental housing sector.
Scape Australia’s principals, Stephen Gaitanos and Craig Carracher, said earlier this week that they have struck a deal with APG and Bouwinvest to develop and operate at least 10,000 rental apartments in Sydney, Melbourne, Brisbane and other major cities.
Last November, US developer Hines formed a A$1.5 billion JV with Canadian pension manager Cadillac Fairview to develop, acquire and operate rental properties across Australia, starting with a set of three apartment development projects which will deliver 850 units.