Local takes on Samma’s prize Southbank site

The build-to-rent market has sprung into life with Australian heavyweight swooping on a major development project in Melbourne.

The Local Kensington build-to-rent complex in Melbourne

The build-to-rent market has sprung into life with Australian heavyweight Local swooping on a major development project in Melbourne.

The sector has been billed as a key part of the solution to national housing shortages and is starting to consolidate as large players take on projects that smaller developers originally proposed.

The expanding Local business, which is backed by Macquarie Group, has picked up one of the largest “shovel-ready” developments in the country in the Melbourne play.

It bought into the hot Southbank precinct flagging that it would get underway shortly so its tower will rise alongside others by the likes of rivals India and Home.

The deal is one of the first build-to-rent transactions since crucial federal government’s Managed Investment Trust legislation changes were unveiled in late 2024, which were designed to aid the flow of capital into the sector.

Local said the project at 65 Haig Street in Southbank would have a completed value of $270m and would have about 312 units. The tie up it has struck with the original developer Samma will see that company remain as landowner while Local develops the complex.

The deal will boost Local’s national portfolio, propelling its total asset pipeline beyond $1.34bn.

The Local Kensington build-to-rent complex in Melbourne

The site is on the edge of Melbourne’s CBD and is close to transport and South Melbourne Market. The planned 39-storey tower will house 312 apartments. Construction is scheduled to commence later this year, with completion targeted for late 2027.

Local head of investments Chris Axsentieff said the company was adding the prime Melbourne development to its growing portfolio. “This project will continue Local’s goal of delivering much needed housing, that improves rental landscape for Australians and spurs the kind of institutional Investment that the recent MIT legislative changes seeks to encourage,” he said.

The project stands out as it offers co-working spaces, health and wellness facilities, an indoor heated pool, sauna and steam rooms, a fully-equipped gym, rooftop lounge, private dining area, entertainment spaces, and pet facilities.

The tower will target Melbourne’s under-supplied rental market and 74 per cent of apartments are configured as studios and one-bedroom units tailored to singles and couples.

The design emphasises sustainability and attainability, with strategic considerations such as no carparking to reduce building costs and a footprint and to align with urban living preferences.

“The addition of this core Melbourne asset to our portfolio responds to the significant under-supply of suitable housing across Melbourne, delivering right-sized housing in greater locations to renters who want quality housing and access to retail, transport, employment, shopping, and all that Melbourne has to offer,” Mr Axsentieff said.

The project is expected to attract increased investor attention as international appetite for the sector grows.

Local continues to demonstrate its agility in identifying and unlocking quality development opportunities across Australia, reinforcing its commitment to innovative and sustainable residential solutions.