AXA IM Alts Adding First Melbourne Project to Australia BTR Platform

AXA IM Alts has agreed to acquire a development site in central Melbourne for the first project in the city under the French fund manager’s Australia build-to-rent platform.

The 105-unit residential complex on Adderley Street in the Victoria capital’s CBD fringe will provide a balanced mix of market and affordable rental housing, the firm said Monday in a release. The project will be built by local development partner PDG and managed by St George Community Housing upon completion, said AXA IM Alts, a unit of banking giant BNP Paribas.

No financial details were disclosed. The Melbourne buy represents the second investment under AXA IM Alts’ BTR affordable housing strategy — backed by institutional investors including Australia’s Clean Energy Finance Corporation — following a 400-unit project in Western Sydney’s Westmead area.

“Underpinned by strong thematic tailwinds including record population growth, constrained housing supply and persistently low vacancy rates, this acquisition reflects our conviction in the long-term opportunity for residential as an institutional sector in Australia,” said Antoine Mesnage, head of Asia Pacific at AXA IM Alts.

Affordability Focus

Acquired by BNP Paribas in July in a deal announced 11 months earlier, AXA IM Alts manages €21 billion ($24.4 billion) in residential assets globally, including an affordable housing portfolio of over €2.5 billion, comprising more than 13,000 units across 160 assets.

The development on 1,606 square metres (17,287 square feet) of land at 137-157 Adderley Street is set to start construction in late 2025, with 53 of the 105 units planned as affordable housing for workers at nearby employment hubs including the Victoria Police headquarters, the Royal Melbourne Hospital precinct and the University of Melbourne.

Designed by Life Architecture, the project will offer a mix of studios and one-, two- and three-bedroom apartments, PDG said in a separate statement. Features will include a rooftop terrace and dining area, communal garden terrace on the ground floor and co-working spaces.

“PDG is proud to be playing a major role in shaping the future of rental housing in Melbourne and to be partnering with AXA IM Alts on this exciting new project,” said PDG founder and managing director Vince Giuliano. “We are committed to delivering high-quality homes that meet the diverse needs of our growing city.”

Vacancy Still Low

Vacancy in Melbourne’s housing market remains tight, sitting at 1.8 percent in June, according to CBRE. Even so, rental growth in the city was flat during the second quarter as median unit rent stood at A$575 (now $374) per week, unchanged from the prior three months and up 4.5 percent from a year earlier, the consultancy said in its latest report, citing data gathered by CoreLogic.

Lower land prices, inner-city development opportunities, supporting infrastructure and earlier government support are factors that have helped Melbourne’s BTR market outpace Australia’s other capitals, the report said.

“Almost 7,000 units are operational (mid-2025), with 6,500 under construction and almost 12,000 in various stages of planning with potential completion by 2030,” CBRE said. “Most of the supply is concentrated in the inner city. Should all mooted projects proceed, Melbourne could account for around 40 percent of potential national BTR supply by 2030.”