GreenFort Capital strikes build to rent deal with BentallGreenOak and Partners Group

Brisbane investment manager GreenFort Capital is poised to become one of the country’s largest build-to-rent players after striking a deal with Canadian-backed real estate house BentallGreenOak and Swiss-based private equity firm Partners Group to grow a local business.

The sector is set to dramatically expand as more people are locked out of buying homes and turn to longer term renting. The area has already attracted big investors and projects are opening.

Macquarie is backing the $500m Local platform and the listed Mirvac has set up. The Daniel Grollo-backed Home business, which has sites in Sydney and Melbourne, is also expanding, along with big global houses like Greystar

GreenFort will acquire and develop a pipeline of build to rent residential projects across Australia and are looking at an initial 1,200 – 1,500 apartments.

GreenFort will fund the deals and develop the business with the backing of its partners. Assets will be managed by specialist operating business Canvas, set up by GreenFort Partners Adam Vaggelas and Nick Singleton.

Mr Vaggelas said Australia’s low housing vacancy rates, limited new apartment supply and lack of institutional grade residential stock presented a significant opportunity.

“Australia has one of the highest rates of urbanisation and population growth, and one of the lowest residential vacancy rates in the developed world,“ he said.

He said these trends, along with increasing housing affordability constraints, created a compelling opportunity to deliver quality managed apartment stock to urban locations.

It is targeting the east coast of Australia including Sydney, Melbourne and Brisbane, with the portfolio seeded by a 30-level, 364 apartment development project located at 2 Cordelia Street, South Brisbane.

The South Brisbane site was acquired by the venture earlier this month. The acquisition represents BGO’s first investment in Australia, a big move for the group that manages $97bn in assets. Partners already has a local presence and has manages $U25bn in private real estate.

The sector is relatively new across Australia and there are few projects in Queensland. Building started last year on Mirvac’s LIV Anura build to rent development at Newstead and Frasers is undertaking another project in Fortitude Valley.