Local vaults to the top of build-to-rent ranks as UBS exits

The race at the top ranks of the build-to-rent sector is taking shape as the housing crisis results in more renters chasing accommodation in the dedicated unit blocks.

The Smith Collective building in Southport on the Gold Coast, which will switch to Local’s platform. Picture: Jerad Williams

Homegrown property funds manager Local has vaulted to the top ranks of the build-to-rent scene, picking up the management of the massive Smith Collective site on the Gold Coast.

The sprawling apartment community, which once served as the Commonwealth Games Village, has been run by an offshoot of investment bank UBS, but the management will now switch to the Local platform.

The expanding Local business, backed by Macquarie Group, has ambitions of rolling out more of its projects nationwide, and already has three projects in Melbourne.

While there will be little change for residents in the apartments, the move marks further consolidation in the emerging sector, in which major institutions own specialist buildings ­occupied by long-term renters.

The industry is gaining pace partly on the back of the housing crisis keeping many people out of the market, but also due to the growing institutional interest in new forms of property.

While Local has not discussed its move to take on the management, it is understood it will make the company the largest in the nation, topping such giants as listed companies Mirvac and Lendlease, both of which are building up large operations.

Local has a total of 1291 build-to-rent apartments, with 814 under construction and 477 operating, so adding the Smith Collective to its holdings would make it the nation’s largest.

Rival players, including the Daniel Grollo-backed Home operation, Mirvac’s expanding LIV business and NSW-based Coronation, which has been expanding in Sydney, are now just behind Local in terms of size, but all are building new projects.

Local projects include its sites in South Melbourne and Box Hill that are under construction and will have 389 units and 425 units, respectively. The company’s Kensington property is operating with 477 apartments.

Smith Collective’s incumbent manager, which was then known as UBS Grocon, developed Australia’s first major institutional-grade rental housing project on the site of the former Gold Coast 2018 Commonwealth Games Athletes’ Village.

Grocon won the bid to develop and then sell down the athletes’ village as a build-to-rent asset to the Abu Dhabi Investment Council. UBS now manages the site as The Smith Collective and it has 1252 apartments on long-term rental.

UBS last year filed plans for a four-tower vertical village with close to 900 apartments at a nearby site in Southport that it also controls. The scheme was lodged with Economic Development Queensland by UBS Real Estate Nominees Australia for towers of nine to 13 storeys, and is not part of the Local deal.

Local has also been boosting its pipeline. Last month it swooped on a major development project in Melbourne. Local said the project, at 65 Haig Street, Southbank, would have a completed value of $270m and about 312 units, under a tie-up with developer Samma.