The Build to Rent 2020 Conference was a virtual event that ran on Monday 7 December, with Vellum Group as one of the two gold sponsors. It was an opportunity for our Managing Partner Binuo Erth to explain in detail our commitment and focus on being a leader in the Australian build-to-rent (BTR) market.
Binuo was able to deep dive into our Places Build-to-Rent Fund, backed by solid Environmental, Social, and Corporate Governance (ESG) principles supporting Vellum Group’s developments Highland and Navali in Penrith.
The invited speakers at the conference were experts from different sectors, including government, superannuation bodies, investment funds, big-four accounting firms and specialised law firms. Besides Binuo, other speakers included:
The Hon. Rob Stokes MP, NSW Minister for Planning and Public Spaces, NSW Government
Jessica Carmichael, Associate Director, Urbis
Anthony Garagounis, National Manager, Delivery – Build to Rent, Mirvac
Daryl Choo, Partner, Financial Services Tax, EY
Felicity Rourke, Partner, Allens
Luke Mackintosh, Strategy and Transactions, Partner, Real Estate Advisory, EY Oceania
Mark Power, Senior Director, Qualitas
Professor Hal Pawson, Associate Director, City Futures Research Centre UNSW
Renee Wirth, Group Executive Director, Office of the CEO, SGCH
Ryan Rathborne, Associate Director and Co-Head Property, CEFC
Tim Chislett, Partner, Allens
Kris Daff, Managing Director, Assemble Communities
John Lucchetti, Commercial Sector Leader, Principal, Australia, Stantec
Keith Lucas, First Vice President, Sentinel Real Estate Corp.
Travis Knipe, CEO, StarRez
Damien Webb, Head of Income and Real Assets, Aware Super
Sarah Amos, Head of Commercial, Queensland Treasury
Tom Forrest, CEO, Urban Taskforce Australia
Julian Cabarrus, Director of External Affairs and Strategy, Association of Superannuation Funds of Australia ASFA
Puian Mollaian, Associate Director of Structured Transactions & Advisory Services, CBRE
Steph Harper, Senior Valuer, Development Valuation & Advisory Services, CBRE
Dr Georgia Warren-Myers, Sustainability Lens Leader, Affordable Housing Hallmark, University of Melbourne
Alex Deluca, Mechanical Project Engineer, Stantec
The conference explored the outlook for BTR in the Australian market. The new asset class is expected to take off in Australia following supportive policies, such as the New South Wales government’s recent decision to cut land tax by 50% for BTR developments.
The BTR model is expected to diversify the existing housing stock, provide more affordable housing, and benefit more and more Australians. With further proposed regulatory reforms, developers and institutional investors are seizing the opportunity to become the first-movers in this emerging asset classes.
Speaking on the panel ‘BTR: Institutional Investors’ Perspective’, Binuo unpacked how the BTR market is growing in Australia. She explained the tangible ESG factors of Vellum’s Places Build-to-Rent Fund and discussed with other institutional investors the likely future of this exciting new asset class.
“Build-to-rent, also known as multi-family housing in Singapore, the UK and the US, has a long history of success in those countries with support from government and institutional investors to solve issues like economic downturns and social housing problems,” says Binuo.
Australian residential property, within which build-to-rent is an asset sub-class, is a well-developed real estate market with an excellent track record of delivering strong outcomes for residents and investors. As Binuo pointed out, Vellum sees areas like Sydney’s western corridor continuing their growth as desirable places to live. Australia has handled both the Global Financial Crisis and now the COVID-19 pandemic incredibly well, while the property market has been reliable even in the face of such crises.
Binuo estimates that the size of the Australian residential property market is AUD$5.5 trillion and BTR is currently not even 1% of the market size, whereas in other countries it is an established asset class and Australia is likely to follow this trend. In 2016, the entry point to the top 50 BTR investors in the US was Berkshire with 23,845 apartments. The number one investor in BTR in US in 2016 held 191,759 dwellings.
“We see the potential for the Places Build-to-Rent Fund to grow to over 1,000 apartments and over AUD$1billion under management by 2025.”
Social responsibility is a key focus for Vellum in all its activities and our Places Build-to-Rent Fund embodies all of the factors we see as favourable to both our investors and the broader Australian community. All of Vellum’s Places Build-to-Rent Fund buildings will incorporate NDIS-assisted living apartments, use recycled water and have solar roof top panels – such measures are incorporated into the building designs to achieve lower energy bills and higher ‘green’ ratings.
“Any resilient and sustainable business has to think about ESG risks and manage them before they cause revenue or reputational losses. COVID-19 is an example of a sudden case of ESG risk, which reminds us more than ever of our responsibility to protect people and the planet. It’s not just about the numbers, it should be sustainable investing, responsible investing, and impact investing,” added Binuo.
“At Vellum, we have seen success in many countries, and our Places Build-to-Rent Fund is on the right track. In fact, our first purposely designed BTR project Highland was completed in 2019 and has been fully occupied over a year now. It has been delivering 5.9% gross returns while also providing comfortable and safe accommodation for our tenants including NDIS recipients while facing the COVID-19 pandemic. We are proud to have been able to provide local support to our tenants.”
To watch Binuo speaking at the Informa conference click here.