State-based land tax changes have seen Vellum Fund Management and Urban Property Group launch the first build-to-rent fund based in NSW.
The Places Build to Rent Fund (Places BTRF) aims to acquire and develop sites around Sydney that are sustainable build-to-rent apartments, with the aim of affordable rents and customised homes for those living with a disability.
Patrick Elias, CEO of UPG, praised the NSW government, who has recently changed land tax legislation as it allows for build-to-rent projects to be viable.
“We are proud to be part of this fund and to be the developer behind one of the first, if not the first, purpose-designed build-to-rent development. UPG is backing the Places BTRF because it will encourage the growth of much-needed build-to-rent developments in Australia,” said Mr Elias.
“We are focused on high-quality build-to-rent properties that deliver the flexible accommodation people increasingly desire. We are also committed to developing properties that provide affordable living or tailored solutions for people living with disability.”
Vellum managing partner Binuo Erth said the Places BTR is about a long-term vision for the company’s investments in the Sydney property market.
“The Places BTRF is about giving investors, including super funds, access to the rapidly growing build-to-rent market while developing high-quality rental properties with affordable living spaces. Highland, our first completed purpose build-to-rent building is likely to serve as a model to the entire Australian build-to-rent sector in terms of community-focused design and social responsibility.”
“UPG’s foresight, particularly at an early planning stage, and their design philosophy, led to the completion of what is a world-class example of what the build-to-rent sector should be striving to achieve,” Ms Erth said.
The fund is targeting a minimum 5 per cent gross return for its investors. Focused on Sydney developments, the fund provides an opportunity for investors, including superannuation funds, to back property developments with a social purpose, as well as a healthy and stable return, with lowest possible risk.
The fund’s proof of concept is the Highland apartment building located in Penrith, the heart of Sydney’s fast-growing western corridor. Completed in 2019, the purpose built-for-rent property is fully tenanted (since early 2019) and features amenities such as a concierge service and assisted living spaces for NDIS recipients.