Investa to build studios at location of Salvation Army site in Sydney

An artist’s impression of Investa’s first studio living project at 140 Elizabeth St in Sydney.

Investa has become the latest property company to turn to Japanese capital to back its expansion in the rising living sector.

The company, which runs a major office portfolio but is making a push into build-to-rent and studio living, has tapped two heavyweight Japanese investors to back a project in the Sydney CBD.

Investa has struck up a strategic partnership with JR West Real Estate & Development Company and Sotetsu Real Estate to deliver its new studio living project at 140 Elizabeth Street in Sydney. It will have an appeal to young professionals and students, as well as other city-dwellers on relatively short lease.

Investa chief executive Peter Menegazzo says the precinct attracted a lot of capital interest and the company had selected “like-minded” partners.

“They are very comfortable with the asset class,” he said. “We think this is a scalable strategy.”

Investa CEO Peter Menegazzo at the Indi development site in Sydney. Picture: John Feder/The Australian

The property is a current site of The Salvation Army, and it will continue to operate from new, integrated, ground floor and level one purpose-built premises once the development is completed.

The move comes in the wake of two other Sydney projects – Mirvac’s $2.3bn redevelopment of Harbourside and Lendlease’s apartment project overlooking Hyde Park – proceed with Japanese backers.

The partnership will deliver Investa’s first studio living project. When finished, the $230m complex will comprise about 251 fully-furnished, self-contained studio apartments along with a range of communal spaces, including co-working spaces, indoor entertainment areas, communal dining zones and outdoor terraces.

“JR West and Sotetsu are globally recognised investors who share conviction in the strong market fundamentals underpinning Studio Living,“ Investa head of new business and origination said Stuart Rowe said. ”We are delighted to establish our partnership with JR West and Sotetsu to execute our studio living venture.”

Studio living appeals to a wide range of people seeking well‑designed, amenity‑rich, conveniently located, and cost‑effective rental alternatives to traditional housing in the city and fringe locations.

Mr Kosuga, executive officer and general manager of the Overseas Business Department, JR West, flagged the company’s keenness to expand in Australia.

“Our partnership with Investa provides access to a high-potential asset class in a dynamic market like Sydney,” he said. “We will continue to explore and discuss further opportunities for joint ventures in Australia,” he said. “We are excited by the opportunity to build scale in Studio Living alongside a proven investment manager.”

Mr Sugiyama, director and general manager of Overseas Business Department, Sotetsu, said the investment was its maiden involvement in the area locally.

“For our first investment in the Australian living sector, the opportunity to partner on a quality project with strong underlying demand fundamentals was very attractive,” he said.

Sumitomo Mitsui Trust Bank supported JR West and Sotetsu with this investment.

Investa chief investment officer Adam Crowe said the company was already established in the build-to-rent arena, and the latest play expanded its remit.

“Having established Indi, our living sector platform, we are delighted to have made our first investment in Sydney CBD’s first institutional grade studio living asset,” he said.

“With development planning underway at 140 Elizabeth Street – our living portfolio grows to over 1,600 purpose-built homes representing a total investment of more than $1.3bn,” Mr Crowe said.

“We look forward to building a successful and long-term partnership with JR West and Sotetsu, and we are focused on unlocking further high quality, inner urban opportunities via our asset creation and investment management capabilities,” he said.

Building is slated to start in 2027 and the asset is expected to be running in mid-2029.