Alternatives Outlook 2024 Report

BUILD TO RENT The BTR sector is projected to play an integral role in shaping Australia's long term housing supply.

In 2024, Cushman & Wakefield expects capital to gravitate to operational platforms where stakeholders have key living sector operational expertise alongside proven track record in originating quality development opportunities in the local Australian market.

Although the sector has gained a significant amount of momentum in recent years, the BTR sector’s expansion has faced short term challenges. These challenges have largely stemmed from high construction and financing costs which have affected the feasibility of many projects and resulted in repeated delays in many instances. Despite these short-term hindrances, investment managers remain committed to the sector with several groups continuing to pursue first and additional round capital raises in 2023. There were also several new entrants to the Australian market in 2023 including Brookfield, Stockland andCharter Hall, demonstrating continued desire for exposure to the sector across institutional investors. Cushman & Wakefield remains confident in the sustained high levels of interest across the sector. To address the housing shortage, industry bodies have advocated for tangible incentives such as streamlined planning and expanded tax benefits to facilitate foreign institutional investment into BTR while simultaneously fostering the development of more viable and affordable housing projects.

Sector size estimate: AUD 5 billion* Prime yields: 4.25% - 4.75%

*Operational stock only

FIGURE 6: MAJOR BTR PLATFORMS: CAPITAL COMMITTED VS REMAINING CAPACITY

KEY TRANSACTIONS

Size AUD

Type

Name

Buyer/Investor

Date

Capital Raise

Scape BTR Fund Mirvac BTR Portfolio Lendlease MQT

APG & Bouwinvest

1.5bn*

May-23

45.8%

Re-Cap

1.8bn*

Mirvac

Jun-23

54.2%

Fund Through Fund Through

650m*

Daiwa House

Jul-23

Box Hill Golden Age BTR Site

360m*

Local

Oct-23

Capital Committed Estimated Capacity

*Total fund size

| AUSTRALIA ALTERNATIVES 15

CUSHMAN & WAKEFIELD