The joint venture that APG participates in to invest in Australian metropolitan new-build rental apartments, can start developing its first two projects. APG is founding investor for GAMV I (Greystar Australia Multifamily Venture I) and has already made a commitment of 350 million Australian dollars (214 million euros). Now that Canadian investor Ivanhoé Cambridge and Finland's Ilmarinen have also joined, the venture can invest up to 1.3 billion Australian dollars. This makes it the largest investor in this category of real estate in Australia.
GAMV I focuses specifically on the Australian build-to-rent sector. These are new build apartment blocks in world city centers, that have been designed and developed specifically for renters. The venture will develop it’s first two projects in central Melbourne before extending the portfolio to Sydney as well. Greystar plans to begin both of the first two projects this year, delivering 1,300 or more rental homes. As many as 5,000 dwellings could one day be held by the new venture.
World city centers
Graeme Torre, managing director of APG Asset Management Asia, explains why this market is so attractive: "This type of housing is already very well established in the centers of global cities outside Asia. In the United States, for example, BTR homes make up 11 percent of the total housing stock. In Australia, it's only 1 per cent. APG has been investing in the BTR sector for some time. In recent years, more and more institutional investors have become active in this market. In the United Kingdom, for example, the sector grew by 28 billion euros in the five years to 2019. APG has benefited from that popularity rise and in Asia we expect a similar development. That is why we finance the sector through partnerships in China, Japan and Australia, and investments in Greystar's operational platform in Asia.
We see it as simply a matter of time before the build-to-rent residential sector gains a foothold in all the key Asia-Pacific markets. So, it is no surprise to us that major investors such as Ivanhoe Cambridge and Ilmarinen have committed to the sector alongside APG in a sophisticated market such as Australia.”
Beyond economics
The strong conviction that APG has to this sector goes beyond just the economic attractiveness. Torre: “If we are all to have a chance of meeting climate goals, continued urbanization and more housing options are key requirements. ‘Build to rent’ is an essential asset class in meeting these requirements. This is one of the reasons why we have been actively targeting for increased exposure to the BTR-sector.”