Inside Build-To-Rent

Build-To-Rent is a relatively nascent residential living market — one that is quickly moving beyond an ‘emerging’ tag as it spreads out across Australia.

To understand the platform is to comprehend that where standard development equates to the construction of residences to be sold on completion, BTR developments are held, operated and rented by the developer.

While the premise is straightforward it does present with a number of issues — among them land tax discounts and premium land transfer tax, alongside funding and consumer uptake issues that have caused it to stutter in its national rollout.

Where the BTR industry in Australia continues to find its footing as a fresh consideration, BTR has been delivered and engaged in US markets for the best part of 40 years. Elsewhere, European markets such as London — which has expanded rapidly in alignment with federal government support since 2013 — has around 28,000 BTR properties completed, 16,000 under construction and 38,000 in planning, according to Statista research.

Local experts such as Craig Godber, CBRE’s Associate Director, Head of Residential and Build-To-Rent Research Australia indicates that local trepidation may be more a case of ‘seeing is believing’ amongst prospective consumers.

“I think that Australians have always partly accepted that there’s either owning a home or private renting, and it’ll take a few successful projects before a gradual uptake by renters is made,” said Godber.

Where BTR differs from traditional renting is in its want to retain renters across extended periods and through a number of additional services such as dedicated concierge services, mail rooms, meeting rooms and mixed-use office spaces.

Further, with one central controlling body overseeing each building operation, BTR offers flexible long-term tenancies, client-centric onsite management as well as appealing allowances in rewards to personalisation (painting and decorating) and pets.

The caveat is that more lifestyle services means increased outlay.

“There is the expectation that rents in BTR developments will be higher as opposed to the private market, and that may take some time for the consumer adjust to,” added Godber.

The premium services offered by BTR have dispelled early market fears about it being rebranded social housing.

“That perception existed early on, particularly as the developments are purpose built, but as people and investors continue to learn about it that stigma fades away.”

Godber is increasingly optimistic about the future, buoyed by with a number of projects by renowned operators Mirvac and Grocon and an expansive market being further fed by various overseas developers.

Sydney and Melbourne remain key with the Victorian capital outpacing the northern city’s pipeline by almost double, according to research from Knight Frank.

The number of BTR apartments in Melbourne’s planning currently sits at 6000, well ahead of Sydney’s 3300 and Brisbane’s 1600.

11.1% of development sites purchased in 2020 in Melbourne were earmarked for high-density, BTR projects while in Sydney that figure was 0.7%.

Despite the recent interest and development proposals in the pipeline uptake is still expected to be rather gradual when compared to the recent explosions in popularity of BTR in Europe.

Godber indicates that further government assistance and incentive, aligned to increased interest at an institutional investor level will help BTR continue to grow across Australia.

“Financial models, the combination of better taxation and the structuring of funds as institutional investment vehicles for build-to-rent are all essential to seeing the sector continue to grow.”

Former Google CEO Eric Schmidt is selling his Northern California estate, which was listed Monday for $24.5 million.

Located in Atherton, an extremely affluent town northwest of Palo Alto and about 30 miles south of San Francisco, the 3.36-acre property is made up of three parcels that Schmidt acquired over the years, according to public records and Compass, who has the listing.

Schmidt, 69, and his wife, businesswoman Wendy Schmidt, purchased the main home in 1990 for $2 million, according to public records accessed via PropertyShark. They remodelled the 1969 home in 2007, and at that time, bought a neighbouring parcel of land, allowing an expansion of the main house and the addition of a guest house, according to Compass, who holds the listing. A third parcel was later acquired, on which the Schmidts added an English garden house and landscaped grounds overlooking the Eastern Hills.

“Finding three contiguous parcels in Atherton is rare. Even rarer are those with views of the Eastern hills,” said listing agent Katharine Carroll of the reSolve Group at Compass. “The location of this residence is ultra private, at the back of a cul-de-sac with the main house built into a hillside that provides privacy and very good security.”

Across the estate, there are five bedrooms, five full bathrooms and six half bathrooms.

The 5,265-square-foot main house also offers a number of private outdoor spaces on its upper level, including a large terrace off the primary suite, another large terrace off a secondary bedroom, plus a third smaller terrace and two balconies.

Behind the main house is a patio with a pool and spa. For even more outdoor space, there’s an entertaining pavilion, an open lawn and an outdoor fireplace area near the guest quarters.

The grounds themselves are also a standout feature, with an array of mature plants and specimen trees. The upper portion of the property’s landscaping is designed around an Amdega-designed conservatory, which was imported from the U.K. Around the greenhouse, there is a garden of raised beds and fruit trees, Carroll said.

“From the moment you step onto the grounds, it feels as if you’ve been transported to a private botanical sanctuary,” she said.

Schmidt served as Google’s CEO from 2001 to 2011, and then became the company’s executive chairman until 2015. He could not be reached for comment.

This article first appeared on Mansion Global

Inside Build-To-Rent

The Australian uptake of the ‘new’ development platform remains dwarfed by overseas expansion — but things are moving.