US company Blackstone puts Melbourne and Brisbane built-to-rent projects on the market

US private equity giant Blackstone is putting two build-to-rent blocks up for sale in a major test of how much demand there is for the sector.

The mixed use build-to-rent complex “Realm Caulfield”.

US private equity giant Blackstone is set to become the latest group to test the country’s surging build-to-rent market by putting two major blocks up for sale.

The group’s Realm operation will put its specialist apartment buildings in Melbourne and Brisbane on the market in a key test of the value of completed stock.

The new kind of apartment buildings are being promoted as a potential solution to the housing crisis as they provide long-term homes for renters which are backed by major institutions.

The sale comes after Blackstone assembled the portfolio and it will continue to be active in the sector, looking for new sites and operations.

The move comes at a time when there is a huge influx of new capital from overseas into the hot area, which existing players are capitalising on as they look for long-term backers.

Real estate agencies CBRE and Savills are handling the sale.

In May, another operator, Arklife, launched a process that put its portfolio and a slice of its management platform up for sale.

That $800m offering is being chased by global players and the group is looking for a strategic investor as it expands nationally.

Investa is also running a sale process for three build-to-rent projects worth an estimated $1.5bn, including its Sydney CBD project and another two in Melbourne.

Blackstone is among the few in the country to have sites up and running, while rivals such as Mirvac and the Daniel Grollo-backed Home operation, are also operating towers.

The US group was an early mover in the local sector.

In 2019, it clinched its first build-to-rent project in a deal worth more than $300m with the family of prominent Melbourne property developer Max Beck.

Blackstone signed a contract with Beck Property Group, run by Mr Beck’s son, Sam, to build the next stage of its $1.5bn Caulfield Village mixed-use project in eastern Melbourne, which was being developed with construction group Probuild.

Realm Caulfield, part of the newly constructed retail precinct below Caulfield Village.

The Blackstone and Beck project has 437 apartments and a full-line supermarket as well as specialty retail stores. The Beck operation stepped in to finish off building when Probuild collapsed last year.

Located 9km from the Melbourne CBD, the Caulfield project is near public transport links and is close to ­Monash University in a sought-after area for renters.

In 2021, Blackstone expanded its build-to-rent empire with the acquisition of a then well-known Brisbane “ghost tower” from Chinese-backed R&F Property Group.

The Chinese billionaire developer offloaded the 20-storey luxury apartment tower for about $100m after it sat ­vacant for almost two years.

Then called the Lotus Tower at Kangaroo Point, it was built by Zhang Li’s R&F Property Group and locked up despite final building approval being granted in 2019. That year its Australian operation posted a big loss and received a big cash injection from its Hong Kong parent.

Delays in the sale and occupancy of the building, which features 200 apartments, town homes and penthouses with views of the Brisbane River, did not stop Blackstone from successfully rebranding and filling up the tower amid a shortage of rental units.