Dutch pension fund asset manager PGGM has formed a partnership with US-based Sentinel Real Estate to develop and manage up to A$1.5bn (€1bn) in build-to-rent (BTR) communities in Australia.
PGGM’s first investment tranche opens up a pipeline of over A$700m in initial development potential for the venture which aims to develop a national portfolio of approximately 2,500 BTR units.
Jikke de Wit, senior director private real estate of PGGM, said: “Although the Australian BTR sector is still relatively small, we believe that it will grow over time and become an important part of the Australian housing market.
“Sentinel is a longtime partner of PGGM in the US, and we are confident their expertise will help us build a new portfolio of high-quality, low carbon apartment communities (in Australia).”
De Wit added: “The sustainability of this investment contributes to our client PFZW’s long-term ambition to align its real estate investments with the Paris Climate Agreement.”
Michael Streicker, president of Sentinel Real Estate, told IPE Real Assets that PGGM held the majority interest in the joint venture, with Sentinel having a “material” stake.
“We have earmarked two projects for the platform, and they would provide around 250 units each.”
Streicker said the platform would then begin to purchase sites in the market as it continued to build out the portfolio to its target size in about three years.
“We started looking at this market in 2012 and bought our first sites in 2015,” Streicker said. “So far, our experience has been great.”
Sentinel opened its first BTR apartments in Perth in March 2019.
“We have tremendous acceptance, great occupancy and rental growth,” he said. “It has worked out better than we thought it would when we started 10 years ago.”
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