Aware Real Estate is to invest A$320m (€194m) to construct a large build-to-rent (BTR) project in inner the Melbourne suburbs.

The real estate arm of Australian superannuation fund Aware Super will provide more than more than 700 homes to Melbourne’s housing market across two major new developments in Melbourne’s inner south, and Preston in the city’s north.

Aware Real Estate CEO Michelle McNally said: “This is a city crying out for more housing and we’re answering the call. Our projects are in areas of strong demand, supported by important infrastructure, key transport links and sought-after amenities.”

The launch of the projects come as Melbourne’s rental vacancy rate sits at a record low, below 1%, with a surge in migration helping to fuel demand.

Aware Super CEO Deanne Stewart said: “Melbourne is one of Australia’s great population magnets, and indeed Greater Melbourne is on track to be Australia’s largest city inside a decade – home to more than six million people.

“Housing is at the very core of the community’s needs and while no one investor can single-handedly deliver the number of homes Melbourne will require over the coming decade, we’re pleased we can be part of the solution with investments that fit squarely with our objective of delivering strong long-term returns for our members. An added benefit is that these projects have such a positive impact on the Victorian community we serve.”

McNally said: “Across Sydney, Melbourne, Perth and Canberra, we already have 10 operational sites in our residential portfolio and that number will keep growing.

“Along with the Preston and Queens Road developments and our recently launched project at Zetland in inner Sydney, we have another two sites in planning and we expect to have more than 2,000 BTR apartments in the national portfolio within five years.”

Victorian minister for planning Sonya Kilkenny said: “Melbourne is the undisputed BTR capital of Australia thanks to our leading reforms and we’ll continue to pull every lever we can to enable 800,000 homes of all kinds to be built over the next decade.

The latest projects will increase the number of homes in Aware Real Estate’s Melbourne portfolio to more than 930 across four sites.

Barings, a long-running partner of Aware Super after the real estate investment manager acquired Altis Property Partners in 2022, is development manager of both sites.

To read the latest IPE Real Assets magazine click here.