Kio snaps up Aria to develop Brisbane rental tower

Artists impression of approved plans for a Kio development in South Yarra, Melbourne

The Queensland capital is set for a landmark build-to-rent tower, the Kio Investment Management operation readying to develop a major South Brisbane complex.

The company, founded by Hines alumnus Sam Bisla, has quietly secured a site from apartment developer Aria Property Group and switched the plan to a rental tower.

Aria had won approval for a striking luxury residential tower two years ago, but parts of the pre-sale market have been patchy.

At the same time, a rental crisis has emerged in Brisbane due to a shortage of stock, making build-to-rent projects more attractive.

Kio is believed to have acquired the site for a price in the mid-$20m range, reflecting Aria’s work on its scheme.

The apartments group had picked up the development site at 10 and 12 Cordelia Street in 2022 for $18m.

Kio has reworked Aria’s scheme to make it stack up under the rental model and secured top-tier builder Hutchinson Builders for the build-to-rent project, with works slated to start shortly.

The project will result in the existing two-level office buildings being demolished and replaced with a 34-level tower.

Artists impression of Kio Investment Management’s plan for a build-to-rent complex in Cordelia St, Brisbane

It will have 275 units from level five of a podium to level 30, and a pool and recreation deck on level 32, according to planning documents. Three levels of parking are planned in the podium, with more spaces in the basement.

Brisbane is drawing more interest as a build-to-rent hub. Hines was one of the early leaders when Mr Bisla was running its local living unit and he took it into the city.

The US investment giant bought two towers in Brisbane last year. It teamed up with Canadian pension fund Ontario Teachers Pension Plan to buy two build-to-rent apartment blocks for about $350m.

But relatively few others have been able to get off the ground.

Mirvac opened LIVAnura in its Newstead residential precinct last month. It has 396 renter-only homes and is part of Mirvac’s $1.8bn build-to-rent venture with investors Mitsubishi Estate Asia and the Clean Energy Finance Corporation, in partnership with the Queensland government.

Aware Super is targeting the $285m purchase of the under-construction Brunswick & Co complex in Fortitude Valley, Brisbane, being developed by Frasers Property Australia.

Kio is one of the fastest moving players in build-to-rent and has projects that will see it undertake developments with an end value of about $1bn. It has the backing of international investment group Warburg Pincus, and has secured several sites in capital cities, with its operations to span both traditional build-to-rent and studio-living projects.

The new group is moving at a time when some early entrants into the build-to-rent market are still digesting the ructions in the construction market.

Kio is also undertaking a build-to-rent complex in Melbourne’s South Yarra and a studio-living development in Sydney’s inner-city Redfern, with build-to-rent projects to also come in Sydney.