Cushman & Wakefield’s Australian Alternatives Outlook 2025 report said that last year was a pivotal moment for the Build to Rent sector. With the market in its early stages, it continues to mature, boosting investor confidence.
Capital raising efforts continued robustly with major players such as Lendlease partnering with Nippon Steel and Grosvenor and Scape securing investment from the National Pension Service of South Korea.
These developments underscore the attractiveness of the Build to Rent sector to internal and international investors.
One of the most notable milestones was the first operational asset trade by Arklife, which reaffirmed the tight yields observed in fund-through and capital raises to date.
The Build to Rent pipeline is mainly based in the Melbourne area, but operators are looking into new sites in the Sydney and Brisbane market.
It is assumed that there will be a significant increase in developments in these two cities, which both suffer from a lack of suitable rental properties.
Over the last five years, Build to Rent sector yields have remained fairly stable, remaining at 4.5% in 2023/24. As more developments come on-line, yields are forecast to compress slightly with a rate of 4.4% in 2026 likely.
Looking ahead, the Build to Rent sector is poised to play a crucial role in meeting the Australian government’s target of delivering a million new homes.
