Property consultancy Charter Keck Cramer has carried out a case study looking at a sample of advertised rents in the Mirvac LIV Indigo Build to Rent development in Sydney Olympic Park, alongside a selection of rents being advertised in private rental apartments (private rented Build to Sell apartments), to determine whether Australian Build to Rent achieve a rental premium.
To better compare like-for-like, Charter Keck Cramer excluded affordable apartments and furnished apartments from the Build to Sell rental sample.
With this, the Research and Strategy team aims to provide evidence-based insights, helping its clients solve the most challenging investment and development decisions. One of the challenges identified is whether Australian Build to Rent dwellings can achieve a rental premium over Build to Sell dwellings.
Based on the rents analysed, the findings show that:
- The median one bed/one bath apartment rent in LIV Build to Rent is 19% higher than Build to Sell.
- The median two bed/two bath apartment rent in LIV Build to Rent is 27% higher than Build to Sell – these figures are listed rents and do not show whether incentives are at play.
What is particularly notable for Charter Keck Cramer is that the Mirvac rental figures do not include rents for car parks or storage (which is ancillary income). This suggests the premium currently being achieved is likely to be even higher than the figures indicate.
However, according to the company, a rental premium for an Australian Build to Rent project is not guaranteed and will almost certainly be sub-market specific and come down to brand, location, and amenities within the building.
Other findings that are coming out of the research include: rents per sqm, growth in rents by bedroom and product type, charges for car parks and storage, the size of balconies in comparison to Build to Sell stock, and how the building has performed during Covid-19.
