Greystar snaps up Fitzroy build-to-rent site as residential property squeeze bites

Unit blocks built for the rental market are being pitched as the solution to the squeeze on residential tenants, and US property giant Greystar has plans for another Melbourne site.

Unit blocks built specifically for the rental market are being pitched as the solution to the squeeze on residential tenants, and US property giant Greystar Real Estate Partners has just snapped up a prime site in Melbourne’s Fitzroy to develop a new complex.

With rents rising and many tenants unable to secure long-term tenure, a wave of developers are putting up new buildings – particularly in Melbourne – to address the crisis.

Greystar is planning to construct a residential facility on the site it has just bought at 155 Johnston Street, Fitzroy, just two kilometres from the Melbourne CBD.

The project joins a wave of developments showing up across capital cities as the rental crisis deepens, with the national residential vacancy rate sitting at around 0.9 per cent.

Greystar Australia managing director Chris Key said this was a rare opportunity to secure a site suitable for build-to-rent (BTR) in Fitzroy, a highly sought-after neighbourhood.

“It is undoubtedly a suburb that is full of some of the city’s best retail stores, galleries, bars, pubs, restaurants, and cafes – and we look forward to being able to extend the lifestyle options in the area with an exciting rental proposition for future residents,” Mr Key said.

This acquisition adds to Greystar’s existing pipeline in Melbourne, with around 2000 BTR units set to be delivered across four projects in key inner-ring suburbs.

Greystar is also planning to build more than 400 BTR residential units with a forecast end value of more than $350m at a Kensington site.

Earlier this year, Greystar acquired 352-400 Macaulay Rd, Kensington, in the City of Melbourne’s Macaulay Urban Renewal Area, which intends to transform the precinct from a mainly industrial area to a mixed-use neighbourhood.

Mr Key said they were hoping to make an impact on housing diversification and choice in Kensington via their Macaulay Road project.

“Working closely with our neighbours in the precinct, we are striving to optimise the interface between our properties to create excellence in placemaking and deliver over 400 residential apartments that are thoughtfully interwoven into the local area,” he said.

“These latest acquisitions add projects in two key target sub-markets and grow our existing portfolio as we continue to deploy our BTR strategy across Australia’s major cities.”

Just this month, Greystar kicked off building on its $500m South Melbourne development in Gladstone St, working with construction firm Icon. It is set to be one of Australia’s largest purpose-built facilities with 700 new residential units.

The projects are benefiting from the Andrews government’s build-to-rent land tax reform, which aims to make housing more affordable by increasing the supply of rental properties in inner and middle-ring suburbs of Melbourne.

Originally published as Greystar snaps up Fitzroy build-to-rent site as residential property squeeze bites