Mirvac seeks investors for Australian build-to-rent strategy

Australia real estate group Mirvac is seeking to raise AUD160m (€108m) from Asian and European investor for its first build-to-rent (BTR) housing fund.

A source close to Mirvac confirmed that a road show had begun but would not offer further details on the fund which has been reported to be looking to raise up to AUD750m.

Mirvac manages AUD17bn across office, retail and industrial markets for large regional and global institutions, including China Investment Corporation, Morgan Stanley and Singapore real estate investment trusts.

Many in the industry see Mirvac’s move into the BTR market as a natural progression. It is Australia’s leading quality residential developer and owns an enviable landbank, which has sites suitable for BTR.

Although in recent months Mirvac’s CEO Susan Lloyd-Hurwitz has spoken of the viability of venturing into BTR to tap housing shortages in key capital cities, she has since declined to go into detail about the company’s plans, including during last month’s results presentation.

Industry sources said Mirvac has identified at least one apartment site in Sydney’s inner west for its first BTR project, and that this will seed the trust.

According to Stephen McNabb, CBRE’s head of research for Australia, if the Australian market evolves along the line of the US multifamily sector, 5% of the dwelling stock, by value, could be institutionally owned within several decades.

Simon Cowley, of CBRE’s debt and structured finance team, said: “In the early phases, the capital stack will be formed mainly through equity rather than debt.

“It will entail institutional investment via either the forward-funding or forward-commitment routes, in joint venture with developers and through partnering with asset managers with expertise in this sector.”

Cowley said this would be the quickest route for institutional investors to achieve scale. By partnering with expert asset managers, they could gain efficiencies in building platforms and brands.

IPE Real Estate has been told that forward-funding is likely to be the favoured option for Mirvac, which has been a pioneer in forward-funding large commercial projects in Australia.

Mirvac will be the first Australian property group to venture into the emerging BTR sector, which has already attracted two large US multifamily players in Greystar which has a joint venture with Macquarie Capital and Sentinel Real Estate Corporation, which is currently building its first projects in Perth, Western Australia.

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