Build-to-rent investment manager apt. Residential strikes Ultimo purchase in $55m play
Build-to-rent investment manager apt.Residential has purchased 1- 3 Smail St, Ultimo.
Build-to-rent investment manager apt. Residential has swooped on a pair of small commercial buildings in Sydney’s inner-city suburb of Ultimo to build up its holdings in a $55m deal with previous owner, Mirvac.
The group acquired the blocks at 1–3 Smail Street, and now plans to convert the buildings to rental apartments and studios.
While there have been relatively few commercial deals struck of late, even though the value of offices has dropped, conversions are now starting to gain pace in inner-city areas across the nation, despite an unfavourable climate for capital raising.
The 1–3 Smail Street property comprises two separate brick buildings that were originally built in the early 1900s that were subsequently amalgamated by Grace Brothers in 1949, and were used for storage and warehousing purposes.
Mirvac had picked up the office buildings from Anton Capital for about $55m in 2015 as part of a play to capitalise on a planned expansion of Broadway Shopping Centre, one of the country’s top-performing malls.
The buildings are currently let to commercial tenants and have a net lettable area of 7796sq m.
apt. Residential managing director Matt Carolan said the company would start work on a development plan for the site that would honour the buildings’ heritage while maximising liveability for future residents.
“The buildings’ heritage value to Ultimo and Sydney is important. By maintaining and restoring certain design elements, the site’s history will be celebrated in our development application,” he said.
“The Smail Street site is close to Broadway Shopping Centre and within walking distance of Central Station, the city and two major universities. We think it is a prime location for high-quality rental apartments and studios.”
In May, apt. Residential announced a $1.5bn investment from Dutch pension fund PGGM, and flagged its intention to build up a national portfolio of assets.
The company’s first Sydney project is a $280m mixed-use build-to-rent precinct in Meadowbank that will be made up of 291 apartments in comprised of one-, two- and three-bedroom configurations over four low-rise buildings.
The Meadowbank development will be complemented by a retail and community precinct and will provide much-needed supply to Sydney’s tight rental market.
apt. Residential’s team has extensive experience in the Australian, British and Southeast Asian residential markets and a substantial living sector track record across build-to-rent, student accommodation, and institutional banking.
“Through our projects, we are aiming to deliver a positive contribution to Australia’s housing shortage, with a goal of creating over 2500 rental apartments,” Mr Carolan said.
