Cadillac Fairview backs Hines in $1.5bn build-to-rent alliance

The development manager and global real estate investor have teamed up with a $1.5bn partnership in the firing build-to-rent sector.

The planned Hines build to rent project in Bank St, South Melbourne. Picture: Supplied

US funds management house Hines has locked in a massive $1.5bn partnership with Canadian investor Cadillac Fairview to grow its presence in the hot build to rent sector.

The area has attracted waves of global capital, as big investors looking to get set early in the nascent Australian industry and rivals have already been pouring capital into projects.

They include Canada’s Ivanhoé Cambridge, which is backing Greystar, and Oxford Properties Group, which is working with Investa on the Indi business, and Singapore’s GIC, supporting Daniel Grollo’s outfit.

The new venture is seeded by three BTR development sites including Hines’ BTR acquisition in South Melbourne back in May, and the companies will develop, own and operate purpose-built BTR assets across the country.

Cadillac Fairview is making a push into Australia and is also working with Lendlease on commercial deals.

Cadillac Fairview senior vice president, investments Asia Pacific, Karl Kreppner said a key area of focus for the company globally was the residential sector, and they were pleased to be investing in the sector in Australia, alongside Hines.

“This investment aligns with our strategic objective of expanding our investment portfolio in Asia by forming partnerships with best-in-class operators and developers in attractive asset classes, such as residential, office and logistics,” he said.

“It also complements our global residential portfolio, which includes large active pipelines across the US, Europe and Canada.”

The planned Hines build to rent project in Bank St, South Melbourne. Picture: Supplied

Leveraging their respective global expertise in the residential sector, the partnership’s investment strategy will focus on projects in vibrant submarkets located near transport, employment hubs, diverse retail offerings and entertainment centres.

Developments will reflect the partner’s ESG convictions, both locally and globally.

Hines’ managing director and head of living for Australia, Sam Bisla, said both companies have seen the attractive long-term defensive nature of the asset class through their international portfolios.

“We have been strategically building a portfolio and are expecting to scale up the BTR portfolio in the short term, and the scale of the partnership shows a huge strategic commitment and belief in the opportunities which BTR presents,” he said.

Hines’ chief investment officer for Asia, Chiang Ling Ng, said Hines had been investing in living assets across Asia for more than 25 years.

Projects range from luxury city estates to low rent, affordable buildings in outer suburbs.

“Both Hines and Cadillac Fairview recognise Australian BTR as one of the most exciting growth opportunities in Asia,” she said.