Build-to-rent About To Boom
|The build-to-rent sector is on the cusp of a boom as lifestyle choices change and home ownership becomes more difficult for some.|
Build-to-rent (BTR) is an alternative development model where a development company holds stock in its project specifically for long-term rentals rather than sell off the individual units. The concept has proven popular in America and the UK.
According to a CBRE report, the Australian BTR development pipeline recently passed 11,000 units with investors favouring assets delivering reliable income streams amid the coronavirus pandemic.
Over the past 12 months, 30 major BTR projects with an average size of 365 apartments totalling 11,667 were confirmed. Another 10,000 BTR units are in planning.
Offshore institutional funding accounts for 50% of the total pipeline, signalling the global attraction of the stable cash flow from BTR in a low-yield environment, CBRE’s associate director of structured transactions and advisory Puian Mollaian says, “The sector is bound to experience some significant growth in the coming years, although we’re starting from a very low base.”