The Australian real estate market is undergoing a massive shift as investors look to capitalize on the build-to-rent asset class. Build-to-rent investment has become increasingly popular in recent years, driven by the need to bridge inflation costs and provide more affordable housing options for Australians. Earlier this month, Kathleen McCarthy from Blackstone visited Australia to discuss this growing build-to-rent investment trend and its potential implications for the future of real estate investing Down Under.
Pros and Cons of Build-to-Rent Investments
Build-to-rent investments offer significant advantages over traditional forms of real estate investments such as single family homes or apartments that are rented out individually. Build-to-rent properties are managed professionally with dedicated staff who can respond quickly to tenant needs – something which is often lacking in other rental models – while also providing investors with long term capital growth potential through appreciation rates that usually exceed those seen in traditional real estate investment.
However, one major obstacle preventing further development within this sector has been tax legislation which does not recognize build-to-rent investments as separate entities from standard residential property portfolios; meaning they cannot benefit from certain incentives available elsewhere within commercial real estate investment circles such as depreciation allowances or reduced stamp duty fees when purchasing multiple units at once. In order for build-to-rent investment asset classes to reach their full potential here in Australia it’s essential that these issues be addressed via legislative reform so investors have an equal footing compared with their international counterparts who already enjoy these benefits.
Australia’s Real Estate Investment Market
Major players like Greystar, Mirvac, Hines and Oxford have all recently made acquisitions into build-to-rent projects across different states throughout Australia’s real estate investment market, indicating a strong appetite amongst institutional level operators looking towards this area. Meanwhile existing landlords continue repositioning existing real estate investment assets into multi unit complexes ready them up accordingly.
How this will Impact Roles in Real Estate Investment
As demand for build-to-rent investments continues increasing so too will opportunities arise related to talent acquisition, especially around management roles needed to ensure smooth running of build-to-rent operations. It will be interesting to see how recruitment trends evolve over coming months given current circumstances.
As build-to-rent investment is an emerging sector in the New Zealand and Australian real estate investment market these individuals will likely come from investment or development backgrounds that have covered operating assets like hotels or retail and traditional operating platforms from the broader residential sector.
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