Scape Principals Launch $1B Sydney BTR Project Under JV With APG, Bouwinvest

Rent-to-Live Co, the build-to-rent venture founded by Scape Australia principals Stephen Gaitanos and Craig Carracher, has launched a 1,000-apartment mixed-use precinct in Sydney, aiming to invest A$1.5 billion ($1 billion) to help ease a local housing crunch.

Backed by Dutch fund managers APG and Bouwinvest, RTL Co is developing The Timberyards in the “tightly held and undersupplied” Inner West suburb of Marrickville, the company said Thursday in a release. In addition to living space, including about 100 affordable apartments, plans call for 3,000 square metres (32,292 square feet) of retail and 8,000 square metres of public green space.

The Timberyards constitutes one of the few large-scale urban redevelopment sites in the Inner West and sits near the newly opened Sydney Metro City line, providing access to the Harbour City’s CBD in seven minutes, according to RTL Co.

“The Timberyards will deliver much needed rental apartment supply to the Inner West of Sydney, as well as create a dynamic community precinct that we hope will add to the already vibrant and effervescent fabric of Marrickville,” Gaitanos said. “The project is fully funded and once we receive State Significant Development Approval, we will immediately commence construction.”

Democratising Rental

The Timberyards is the first build-to-rent project for RTL Co, which Gaitanos and Carracher formed last year to develop and acquire assets in Australia’s emerging build-to-rent sector. The JV focuses on urban, transport-oriented assets to give capital partners access to branded, low-risk, resilient cash flow, according to the company.

The venture is targeting 10,000 apartments in Sydney by 2030 by leveraging the scale and operational capability of Scape Australia, the largest residential-for-rent owner-operator in the country with nearly 19,000 beds across 38 assets. APG and Bouwinvest were early investors in Scape, committing A$150 million to the developer’s first Australia joint venture in 2016 and also backing the Core Program student housing fund.

The Timberyards site was rezoned in 2017 from industrial to mixed use and high-density residential and will pay homage to its heritage as a working timberyard, incorporating elements of the existing warehouse into its design, RTL Co said. Carracher described it as the first of many projects in the company’s ambition to “democratise” the rental market.

“Our position as the leading local operator in the residential-for-rent sector means that we can offer inspiring spaces and intelligent design, with a unique value proposition to renters,” he said.

Sydney’s rental vacancy rate stood at 1.6 percent in September, according to data from SQM Research. Apartment rents in the city held steady on a quarterly basis in the July-September period at a record-high A$720 per week, up 5.9 percent year-on-year, Domain Group reported.

Student Beds Still Hot

The announcement of RTL Co’s maiden project comes after Sydney-based Scape recently closed on A$3 billion in fresh debt financing, with part of the offering nearly three times oversubscribed amid growing appetite for purpose-built student accommodation in the country.

Mingtiandi reported last week that US multi-family giant Greystar was near a deal that would give it ownership of an Australian student housing portfolio spanning 5,662 beds, citing market sources.

The biggest rental housing landlord in the US is in exclusive talks with Singapore’s GIC and SGX-listed developer Wee Hur to invest in the set of seven properties in a transaction valuing the portfolio at A$1.6 billion, according to an account in the Australian Financial Review.

While the deal is understood to require Greystar to raise additional capital, a successful transaction would allow the US investor to gain a foothold in a market that it has been coveting for some time.