Morgan Stanley Real Estate Investing (MSREI) has partnered with developer Homecorp Property to create a A$200m (€121.5m) residential precinct in Queensland, Australia.

The partners will build the Gold Coast’s first dedicated build-to-rent (BTR) project, Capital Court, located within its education and technology hub, Varsity Lakes.

IPE Real Assets understands that MSREI is investing in the project on behalf of a global value-add/opportunistic fund.

The four-tower complex will be built in two stages, with the first stage due to begin later this year. The project will deliver 446 one- and two-bedroom apartments.

Ron Bakir, Homecorp founder and chief executive officer, told IPE Real Assets that BTR was a new asset class for his group.

“We have been following its progress in the US and the UK, and believe that, in the current economic environment, we need an asset class that can provide a source of stable long-term income,” he said.

While Homecorp had been researching the BTR market and looking at appropriate sites for its first project, Bakir said, MSREI, too, had been doing due diligence on the BTR sector in Australia.

“Morgan Stanley recognises that BTR is a compelling business at a time when affordability constraints are impacting homeownership levels,” he said.

The level of rental housing vacancy on the Gold Coast was currently around 2%, and tight rental vacancies had persisted for many years due to strong population growth and a lack of supply, Bakir said.

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