Real estate service provider and consultancy Cushman & Wakefield has released data from its Australia Alternatives report. It found that the Build to Rent sector is projected to play an integral role in shaping Australia’s long-term housing supply.
The challenges the sector has faced have largely stemmed from high construction and financing costs, which have affected the feasibility of many projects and resulted in repeated delays in many instances.
Despite these short-term hindrances, investment managers remain committed to the sector with several groups continuing to pursue first and additional round capital raises in 2023, Cushman & Wakefield state.
There were also several new entrants to the Australian market in 2023 including Brookfield, Stockland and Charter Hall, demonstrating continued desire for exposure to the sector across institutional investors. Cushman & Wakefield remains confident in the sustained high levels of interest across the sector.
To address the housing shortage, industry bodies have advocated for tangible incentives such as streamlined planning and expanded tax benefits to facilitate foreign institutional investment into Build to Rent while simultaneously fostering the development of more viable and affordable housing projects.
In 2024, Cushman & Wakefield expects capital to gravitate to operational platforms where stakeholders have key living sector operational expertise alongside proven track record in originating quality development opportunities in the local Australian market.
