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Australian property investor Cedar Pacific and Japan's Sumitomo Forestry have today announced a strategic partnership to develop build-to-rent (BTR) apartment blocks, starting with a river-facing project on 50 Quay Street in Brisbane that is currently being built by Hutchinson Builders.
The first planned project, incorporating 475 apartments of which 50 per cent are set to be offered at below-market rents, is part of the Queensland Government's affordable BTR program.
The project partners note the building is being constructed to 5-star Green Star standards with the intention to operate at net carbon neutral from day one, in line with sustainability principles they intend to underpin all assets developed through the partnership.
The joint venture also has a pipeline of other projects in Melbourne, Canberra, Brisbane and Auckland.
"This partnership allows us to combine both companies’ development expertise with leading-edge sustainability practices, creating communities that are not only desirable places to live but also contribute positively to the environment and communities in which they are located," says Cedar Pacific CEO Bernie Armstrong.
"We are honoured to partner with Sumitomo Forestry to develop high-quality BTR communities in Australia and New Zealand."
Sumitomo Forestry Australia's managing director Yasuhiro Odagane says the group is committed to expanding its sustainable development business globally, with this partnership with Cedar Pacific representing "a significant step forward".
"Our combined expertise will allow us to deliver innovative BTR communities that promote the use of timber technologies such as Cross Laminated Timber (CLT) to meet the needs of residents and contribute to the creation of a more sustainable future," adds Sumitomo Forestry Australia general manager George Konstandakos.
A capital raise was undertaken to support the joint venture for an undisclosed sum, and Cedar Pacific was advised by Savills Capital Advisors alongside Savills Australia and New Zealand.
"BTR continues to provide investors with attractive risk adjusted returns, given the favourable supply/demand dynamics and resilient cash flows," says Savills Capital Advisors co-head Joe Guilfoyle.
"As a leading platform, with both BTR and PBSA expertise, we are delighted to have assisted Cedar Pacific in securing this first tranche of capital with a high quality institutional investor."
"With record low residential vacancies of sub-1% nationally in Australia, rents continuing to increase, and housebuilding falling, we see BTR playing an increasingly important role in plugging this housing gap," adds Savills Australia and New Zealand head of operational capital markets, Conal Newland.
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