Macquarie’s Local Residential Acquires $259M Melbourne Project From Hines

Local Residential has acquired a rental apartment development in Melbourne from US builder Hines, with the project said to have a stabilised asset value of A$370 million ($258.8 million).

The site at 15-37 Bank Street will yield 355 apartments with a mix of studios and one-, two- and three-bedroom units, Local said Friday in a release. The project is Local’s second in the inner suburb of South Melbourne, following the 406-unit 245 Normanby Road, which is due for completion later this year.

The latest deal gives the build-to-rent specialist backed by Macquarie Asset Management a portfolio of 4,000 units with a stabilised value of A$3.25 billion, including 2,156 operational units valued at A$1.55 billion.

“Securing this second South Melbourne site is incredibly exciting, enabling us to deliver 355 additional residences in one of Melbourne’s most connected inner-city precincts,” said Chris Axsentieff, Local’s head of investments.

Aussie Rental Reset

Houston-based Hines had put 15-37 Bank Street on the market in late 2024 as part of a trio of Melbourne development sites for sale, saying at the time that it would focus on establishing a portfolio of operating rental apartments under its Aussie BTR joint venture with the Ontario Teachers’ Pension Plan.

Hines set up the BTR JV in late 2022 with Canadian pension manager Cadillac Fairview, which served as the real estate arm of Ontario Teachers’ until a restructuring in 2023 brought the property investment operation in-house.

The venture set a target of A$1.5 billion worth of rental homes in Australia, including the seed assets consisting of the three Melbourne developments that were expected to deliver 850 units and have a value of A$820 million once completed and stabilised.

Hines had acquired the biggest project of the three, 15-37 Bank Street, from mainland-backed developer Ousia Investments in May 2022 for a reported A$40 million. The Texas builder picked up the project just three months after its A$30 million acquisition of a site along Macauley Road in northern Melbourne from a group led by Singapore’s City Developments Ltd.

The third asset is a site farther north in Brunswick purchased by Hines in August 2021 as the company’s first-ever Aussie BTR project for a reported A$16.5 million.

Banking on New Supply

The development at 15-37 Bank Street will set aside 10 percent of the units as affordable housing and offer 1,100 square metres (11,840 square feet) of premium amenities, including co-working spaces, gym and wellness facilities, lifestyle and entertainment areas, a heated pool and a rooftop terrace, according to Local. Transit options include multiple trams along St Kilda Road and the ANZAC metro station connecting to universities and key health institutions.

“The extensive amenity offering and high-quality sustainably designed apartments that offer security of tenure for renters, combined with prime location of the asset is consistent with Local’s offerings in Southport, Kensington and the newly opened Box Hill location,” Axsentieff said.

The news comes after Local earlier this month was appointed by Development Victoria to deliver the third and final phase of a project in Melbourne’s inner north area. Plans call for 360 new homes on Parcel A of the former Fitzroy Gasworks industrial site, with the overall precinct expected to add 1,400 homes to Melbourne’s housing supply.

In August last year, Local secured the management rights for Australia’s largest BTR property, the 1,252-unit Smith Collective, establishing a presence in Queensland for the Melbourne-based company co-founded by Matt Berg and Dan McLennan.