Oxford Properties (Oxford) and Investa Office Management (IOM) today announced the acquisition of Oxford’s first Melbourne build to rent site at 3 McNab Avenue, Footscray, further growing its pipeline in the burgeoning Australian build to rent sector.
The acquisition provides entry to the highly attractive Melbourne market, taking Oxford's total build to rent pipeline in Australia to approximately 1,000 units. Oxford is currently developing the first build to rent site in Sydney’s CBD, with Investa providing Investment and Development Management services on the project. Pitt Street South is being built over the Pitt Street Metro station and will commence construction next year, to deliver a 39-level tower with ~230 units by the end of 2023.
The acquisition is the first following Oxford’s recent purchase of a 50% stake in the Investa management platform. Investa will provide its fully integrated service offering to all of Oxford’s commercial assets in Australia and implement a strategy to build a leading build to rent business in the country. The build to rent business will initially focus on growing its presence in Sydney and Melbourne.
The Footscray site is expected to yield ~700 dwellings with a broad mix of apartment types.
Alec Harper, Head of Australia, Oxford said: “The Footscray acquisition is in line with Oxford’s strategy to actively grow its exposure to Australia and the nascent build to rent sector, with a focus on assets in core markets that offer scale, access to wider amenity and the right household demographics.
“Oxford has a strong track record delivering transformative build to rent precincts in the UK and North America. Leveraging Investa’s local market expertise and team, we’re confident Footscray will provide a new level of quality and amenity to Melbourne’s inner-city rental market.”
Located immediately adjacent to Footscray Station, in close proximity to Victoria University and a 15 minute commute to the Melbourne CBD, the area is expected to experience strong population growth, which will be boosted by the planned $1.5 billion re-development of the Footscray Hospital.
James Greener, Fund Manager, Build to Rent, Investa said: “McNab Avenue is a well-located, transit-oriented site which provides an exceptional opportunity to develop a place-making build to rent precinct of 700+ units, in close proximity to the Melbourne CBD.
“Ultimately, we are looking to deliver developments that will revitalise a site and its surrounding area and establish build to rent accommodation as the leading residential rental option in Australia,” said Mr Greener.
Peter Menegazzo, Chief Investment Officer, Investa said: “The Australian build to rent sector has been identified as one of the most attractive institutional investment opportunities globally. Pleasingly, Australian state governments are starting to realise the potential of the sector and the important role it can play in the COVID-19 recovery and in dealing with housing affordability issues. State tax reforms being considered or as is the case in NSW – being implemented, are removing a significant barrier for the sector.
“With a growing pipeline of projects and increasing interest from investors looking to make an investment into the sector, we are considering opportunities to bring in capital partners alongside Oxford’s equity to help fund the portfolio’s growth - underpinning Oxford’s commitment to build a significant build to rent portfolio in the gateway cities of Sydney and Melbourne,” said Mr Menegazzo.