Malaysia’s OSK joins team Gurner for rental play in Melbourne’s Southbank
Developer Tim Gurner and finance house Qualitas’s build-to-rent business have struck up a joint venture with Malaysian developer OSK Property to develop and run a residential tower in the $2.8bn Melbourne Square precinct in Southbank.
The luxury entrepreneur has been one of the pioneers of the emerging sector and the planned building is expected to spark up the massive precinct and give it an edge against traditional developments.
The deal has been secured by the pair’s venture, known as GQ, and will offer more international investors a chance to back the platform, which has only taken on a single backer previously.
Malaysia’s heavyweight OSK Group will retain an ownership stake in the rental tower alongside GQ, which will develop, manage and operate the property.
It will be designed by Cox Architecture and bolster the mixed-use offering at the Melbourne Square precinct, with about 500 units and communal amenities. The overall precinct will have five towers, a park, a Woolworths, childcare and retailers, with the new tower set to add best-in-class amenity.
It will sport environmentally-sustainable design including 5-Star Green Star certification, an inset energy network and net-zero energy emissions. The building will be all-electric and the development will run as carbon neutral.
The move means OSK Property can convert one of the Melbourne Square towers into a retained asset in its portfolio, that will see it shift beyond traditional build-to-sell units.
The Southbank market is firing and GQ has a separate BTR project under construction on City Rd in Southbank, while OSK Property recently completed two deals to buy neighbouring parcels at 87-117 Queensbridge St and 190 City Rd for a future mixed-use development.
The GQ BTR platform launched in 2021 with three initial seed sites. In Melbourne, it has the $300m Beach House in Melbourne’s St Kilda – which is nearing completion ahead of the first residences hitting the market in early 2024 – and a $350m tower at City Rd in Southbank, and in Sydney the 61-storey, $450m project in Hassall St, Parramatta.
Building on the Melbourne Square site is due to commence in the first quarter of 2025.
“It’s a project we’ve been watching for many years, and we are looking forward to contributing first-class rental accommodation to the precinct,” Gurner Group chief development officer Robert Clarke said. “We are excited to be able to provide an opportunity for further capital parties to join in on our platform’s growth as we continue to grow throughout Australia,” he said.
“This joint venture makes a lot of sense for us as it’s a shovel-ready precinct that will deliver much needed rental supply to the market in an area that’s growing and supporting a large population,” he said. “With the current demand for rental stock still at historical highs, we are actively looking at many different ways to add to our portfolio whether that be partnerships, joint ventures or traditional acquisitions.”
OSK Property Australia CEO, Chong Boon Woon said the joint venture with GQ was “the next evolution of our Australian pipeline, allowing us to go where the market is, recognising the under-supply of the rental accommodation in Melbourne, while enhancing the offering at Melbourne Square and maximising the position of our existing portfolio”.
“We were motivated to seek a joint venture partner after recognising the under-supply of rental accommodation throughout Melbourne – we are looking forward to contributing to high-quality rental options in the city, while providing another architectural landmark building in an amenity-rich precinct,” he said.
Qualitas’s global head of real estate Mark Fischer said the firm had strong interest from global investors in build-to-rent and would shortly launch its next capital raising.
“The GQ BTR platform’s thesis is underpinned by the current macroeconomic backdrop that sees residential vacancy at its lowest level due to an entrenched, and deteriorating housing under-supply in Australia. We believe the BTR sector is well-placed to service this growing deficit and the established GQ platform is attractive to sophisticated investors seeking this exposure,” he said.