Developer announces Richmond ‘build-to-rent’ project

June 17, 2018 by  

Melbourne construction firm Salta Properties has revealed plans for a mixed-use build-to-rent project near the Victoria Gardens shopping complex in Richmond.

The project, which will be the second of its type from Salta, will comprise five buildings between 7 and 13 levels high. In addition to over 100 one-, two- and three-bedroom apartments, the site will offer 4,000 square metres of office space and nearly 9,000 square metres of retail floor space. This additional commercial activity in the Victoria Gardens corner of Richmond means extensive opportunities for graphic design firms and print shops to provide letterheads, business cards, and other specialised services.

The developer hopes to capitalise on a recent shift in economics for large-scale construction projects. Long popular in the US and UK, the build-to-rent model is starting to take off in the inner cities of Australia’s capitals. In simple terms it involves construction of multi-apartment complexes, the ownership of which is retained by the developer or institutional investors who market it as a long-term rental proposition. The concept may be becoming more attractive due to a slowing market for residential apartments, from which many Melbourne suburbs are already suffering a glut.

Salta Properties managing director noted build-to-rent is not without its challenges. He admits:

"To get it to work… you have to accept significantly reduced yields.”