Savills Capital Advisors has been appointed by Cedar Living, the Australia and New Zealand ‘living’ specialist investment managers, to raise AU$500m for a new seeded BTR vehicle.
Cedar Pacific’s new BTR vehicle has a pipeline of two seed assets totalling 833 units already under control – one in Auckland, New Zealand, and one in Brisbane, Australia (pictured) – with a further nine assets totalling 3,500 units in the pipeline, including four with development approval. The investment strategy will target assets in key capital cities including Perth, Sydney, Melbourne and Canberra.
The Federal Government of Australia recently announced a reduction in the managed investment trust (MIT) withholding tax rate for newly constructed residential BTR projects after 1 July 2024, which will allow foreign investors in qualifying jurisdictions, including Singapore, Canada, Japan, Netherlands, Germany, the UK and US, a reduced rate of withholding tax – from 30% to 15% – on “fund payments” in relation to BTR projects in Australia.
Bernard Armstrong, CEO of Cedar Pacific, said: “Affordable and professionally managed housing is key to a growing population, fuelled by millennials, older Gen Z’s and the return of higher immigration numbers. We are passionate about creating positive investment opportunities with responsible social and environmental factors. The recent reform of MIT will go far to encourage investment into the growth of a sector that can respond to our housing shortage.”
Joe Guilfoyle, co-head of Savills Capital Advisors, added: “The build to rent sector, whilst relatively new in Australia and New Zealand, is firmly established in UK and Europe. Due to similarities between these markets we anticipate strong interest from institutional investors both in Australia but also internationally. We anticipate attractive risk adjusted returns in the BTR sector in Australasia due to forecast rental growth as the market matures over the next few years.”
Conal Newland, head of operational capital markets, Savills Australia and New Zealand, said: “The structural undersupply of purpose-built residential assets in Australia and New Zealand looks set to continue into the medium term given lead in times to deliver new projects. Taking into consideration these obstacles, we expect strong demand for this opportunity.”
