Samma Property Group and impact investment firm Brightlight have snapped up a fresh site after partnering up to “disrupt the rental sector”, beginning with four premium build-to-rent projects in Melbourne to the sum of $750m
A capital raising is currently underway to deliver the four shovel-ready projects leading with the development planned for 65 Haig Street, Southbank.
The projects are set to be delivered between 2022 and 2025 and create 1412 apartments and house more than 2800 residents.
Samma Property director Simon Abdelmalak said the focus has been on creating environments for affordable and secure housing purpose built for people to be living in their apartment complexes for years at a time. This has only become more important emerging from two years of various lockdowns.
“What we’ve learned over the years is that buildings are subservient to the vision,” Mr Abdelmalak said.
“What we are trying to do here is improve people’s lives. Now that we are coming out of Covid, there are a lot of loneliness and isolation issues, particularly in large scale buildings.
“What we’re able to do is create an ecosystem where there are better communities that are established within these buildings and because of that, we’re calling these projects designed-to-rent.
“You’ve got a longer tenure of people living there so therefore you can form relationships. And you can get a much better sense of community.”
The projects have been proposed in inner-city locations close to public transport. All will include a high-level amenity and gathering spaces in prime locations on the site, which would traditionally be saved for the more expensive housing options within a build-to-sell project.
The company has just acquired a site at Lormier Street in Docklands, in a deal brokered by Lukas Byrns, Marcus Neill and Luke Etherington of Cushman & Wakefield, on behalf of state government body Development Victoria.
Worth $200m when complete, the project is expected to deliver 300 apartments for 700 occupants.
Residential property prices have climbed 21.6 per cent nationally since October last year when the current housing boom began.
Housing affordability has worsened as a result, with the segment of first-home buyers accessing the market falling significantly over the same period, as shown through Bureau of Statistics lending figures.
The rise in house prices to record highs has coincided with the tightest rental market in a decade, pushing rents 8.9 per cent higher than they were a year ago.
The pandemic highlighted Australia’s reliance on mum and dad investors to supply a national rental stock and eviction moratoriums put on display the financial burden of the co-dependent relationship.
The managing director of Brightlight, Samuel Richards, said institutionalising high-quality and purpose built rental stock would help alleviate some of the pressure on tenants and offer them security in their housing situation.
“This is the private sector responding to a community challenge,” Mr Richards said.
“The mix is a combination of global investors, as well as our institutional investors in Australia who are saying this sector is part of a broader solution to housing accessibility. We are also seeing this as an alignment of our community needs made here in Australia and the portfolio needs of global institutional investors.”
Longer-term, Samma and Brightlight are building a pipeline comprising 11 developments inclusive of the four shovel-ready projects, to the value of more than $1.7bn by the 2028 financial year.