Diversified professional services and investment management company Colliers and property consultancy Savills have announced that the Union Quarter Village mixed-use Build to Rent scheme in Spotswood is for sale.
A 100% freehold interest in this recently completed Build to Rent development is being offered for sale via an International Expressions of Interest campaign, closing on Thursday 27 June 2024.
Situated only 15 minutes away from Melbourne’s CBD, Union Quarter Village is nestled between Yarraville and Williamstown, Spotswood, offering its residents suburban tranquillity and city convenience. It will be further enhanced with near-term completion of major infrastructure projects in both the neighbourhood and across the fast-transforming Inner West.
“What makes this asset so attractive to the many investors wanting exposure to the strength of Australia’s $10.3trn residential asset class fundamentals, it that investment in Union Quarter Village does not require taking any development risk. Union Quarter Village is the first completed asset of its kind to be brought to market for sale.”
Conal Newland, Head of Operational Capital Markets, Savills
Union Quarter Village provides significant investment through its integration of residential, retail, health, wellness and community facilities. The on-site retail centre, which covers over 11,000 sqm, is anchored by Woolworths and Dan Murphy’s and features speciality shops and a variety of food and beverage outlets including a new generation brewhouse.
Its sense of community is further enhanced by the incorporation of a Health & Wellness Centre, medical clinic and a future Childcare Centre (subject to approval).
“Union Quarter Village brings together the right mix of retail for its undersupplied catchment with the added benefit of 600+ immediate customers in the apartments above.
“It is already redefining Spotswood with incorporation of the only full-line supermarket in its Primary Trade Area, with plenty of easy at-grade car parking and exposure to 27,000 passing cars daily.
“The retail WALE of 13.2 years reflects that majors and mini majors account for 84% of floorspace – this underpins the long-term value of this unique asset and makes it so appealing.”
Tim McIntosh, Retail Middle Markets Director, Colliers
Set across four buildings between three to eight levels and two ha of true inner city real estate, Union Quarter Village’s residential component comprises 332 apartments, including 32 SDA and four Onsite Overnight Assistance apartments across two of the buildings.
The distinct composition of the Union Quarter Village will appeal to many domestic and international buyer groups, with the asset’s value underpinned by the security, diversity, and level of income it is already generating and the strong future rent growth outlook.
The significant change to FIRB policy that was just announced in the 2024 Budget will now facilitate international investors to directly own established residential property, but only if it is a complying operating Build to Rent development like Union Quarter Village.
“The take-up of Union Quarter’s larger, well-designed and diverse apartments has been exceptional. I am not at all surprised that residents are really embracing the convenience of living in the Inner West’s latest mixed-use village.
“With Spotswood Station being only a 250m walk away, residents can easily go directly to Williamstown Beach in one direction or to the CBD the other way in six stops. By 2025, Spotswood will also only be five stops to Parkville when the new Metro opens.”
Jozef Dickinson, National Director, Colliers
Previously, FIRB rules prohibited foreign entities from owning established dwellings unless they were to be redeveloped for additional housing.
“The recent FIRB policy change removes a significant barrier to international investment into Australia’s Build to Rent market that will also support new development by creating greater liquidity and a wider purchaser pool for trading Build to Rent assets.”
Robert Papaleo, Residential Capital Markets National Director, Colliers
One of the new residents, Valentina, has just moved from a CBD apartment.
“I have just moved into The Hobson at Union Quarter and I am absolutely loving it. From the bigger apartment to the beautiful outdoor courtyards and the convenience of having a big supermarket and other retailers’ downstairs, it has everything I need.”
Valentina
Australia’s housing undersupply will only become even more acute especially in Melbourne, where population growth reached an historic high of 168,000 in 2022/23. This fundamental market factor will underwrite continuing peak occupancy and elevated long-term rental growth.
With Melbourne’s vacancy rates remaining stuck at record lows of near 1%, Union Quarter Village has already leased over 130 apartments since fully opening in January 2024.
“Union Quarter Village has all the fundamental attributes of a core defensive asset with diversified and stable income streams. With today’s challenging development and construction cost environment, a completed Build to Rent asset of this scale, assuming a two ha inner city site is available, has considerable inherent value.”
Paul Savitz, Savills
