Blackstone has indicated its plans to invest heavily in Australia’s build-to-rent (BTR) market, with interest rate rises responsible for the plans.
Regarded as holding the largest private real estate portfolio on the planet, Blackstone plans to capitalise on the skyrocketing Australian BTR market. Savills estimates approximately $3.5 billion has been invested in the industry since January 2021, with approximately 15,400 new units estimated to reach completion in 2024.
In an interview with the Australian Financial Review, Blackstone’s Co-Head of Real Estate Kathleen McCarthy says the investment fund is looking to build on its BTR investment down under.
“We would love to find opportunities to do more if we can,” she says.
As a result of inflation and in a bid to stay ahead of rising costs, 80 percent of Blackstone’s portfolio consists of warehouses, rental housing, hospitality and life sciences accommodation. $23 billion of Blackstone’s property portfolio is located in Australia, with Melbourne’s ARM Architecture-designed Realm Caulfield (pictured) the first of two BTR investments the fund has made in the country.
Realm Caulfield will offer 437 rental apartments and give residents access to a number of communal spaces. Blackstone Real Estate Principal, Tom McDonald was quoted in 2022 as saying there is a major demand for dedicated rental precincts.
“There’s a growing demand for rented residential properties, which spans across multiple generations,” he says.
“It’s important to have a range of housing types, tenures and price points in the right locations and across the housing continuum. What sets Realm Australia apart is that it is a specialist standalone rental only business.”
The high-quality, amenity-focussed design of Realm Caulfield paints a relative picture of future Blackstone-backed BTR projects. While there has been no announcement as yet of future projects, the indication from one of the world’s real estate giants is that they are only just warming up in the BTR market.
