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Lendlease (ASX: LLC) has reached a deal with Japan's largest home builder Daiwa House to deliver a build-to-rent (BTR) apartment development at Melbourne Quarter, forming the "final piece" of the mixed use precinct at the southern edge of the CBD at 646-666 Flinders Street.
The two companies recently partnered to deliver Claremont Hall residences in Manhattan in New York, and have committed to collaborating on real estate development opportunities in global gateway cities.
Lendlease will develop, construct and act as the investment manager for the development, which has an end value of circa $650 million and will be 25 per cent owned by the Australian company. Construction is set to start in August with occupancy anticipated in early 2026.
The partnership marks Daiwa House’s entry into Australia’s BTR market, and will be the second project in this property asset class delivered by Lendlease in Australia. The first is with QuadReal Property Group at the Brisbane Showgrounds, comprising 443 units spread over 37 levels.
Last month Lendlease was selected by the City of Melbourne as the preferred development partner for a revitalisation of the southern side of the Queen Victoria Market - a project involving a capital expenditure of $1.7 billion, which will include a BTR residential component with around 560 apartments and affordable homes.
The BTR project announced today is set to have 797 residences in a mix of studio, one, two and three-bedroom apartments spanning 45 levels. Lendlease expects the Melbourne Quarter itself will be home to 14,000 workers and more than 3,800 residents on completion.
"Daiwa House’s investment in our build-to-rent project in Melbourne further strengthens the relationship between our two organisations as we bring the best of our shared global expertise to this development opportunity," says Lendlease Australia CEO Dale Connor.
"This announcement highlights continuing demand from our Japanese partners for high quality opportunities across our global project pipeline – in total, we’ve now secured Japanese investment in projects totalling approximately $11 billion in end development value. It also represents a major vote of confidence in Australia’s property market."
Daiwa House Australia CEO Koji Morishige says housing accessibility is "front of mind" for the company, adding this BTR opportunity is "reflective of our commitment to assist with increasing the supply of quality and well positioned rental accommodation for the residents of Melbourne".
"We are committed to broadening our development footprint in Australia and welcome the opportunity to further expand our global relationship with Lendlease to deliver to the Melbourne community this quality build-to-rent opportunity," Morishige says.
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