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National developer ADCO Group has offloaded two build-to-rent (BTR) projects in Brisbane comprising 354 apartments for a reported $350 million to North American investors Hines and the Ontario Teachers’ Pension Plan.
The partners have acquired the Cordelia tower in South Brisbane, which is currently under construction and due for completion in the first quarter of next year, and the Robertson in The Valley which was completed in 2021.
Canada’s Ontario Teachers’ Pension Plan has partnered with US-based BTR investment manager Hines to secure the assets as they capitalise on sustained demand for housing in the region.
While financial details of the acquisition have not been disclosed, the deal is widely reported to be about $350 million.
Cordelia comprises 265 apartments across 30 storeys, while Robertson is a smaller boutique project of 89 apartments.
“With the Australian population expected to see continued growth and consumer preferences in the country moving more towards the rental sector, we see strong, long-term potential in the Australian multi-family market,” says Jun Ando, the head of Asia-Pacific real estate at Ontario Teachers’ Pension Plan.
“These assets provide us with a strategic entry point into Brisbane and, working alongside Hines and Arklife, we will look to offer a compelling value proposition for tenants and create value for our stakeholders through active asset management.”
The two projects were developed by Arklife, the BTR arm of ADCO Group, which is Australia’s fifth largest builder with an extensive portfolio of commercial, industrial, retail and infrastructure projects.
Arklife is currently undertaking a third Brisbane BTR project, the 327-apartment Constance at The Valley, which is not included in the sale announced today.
The Brisbane-based Arklife, which is led by founder Scott Ponton and co-owned by ADCO Group, earlier this year put its BTR portfolio worth about $800 million on the market in order to explore new development opportunities nationally.
Under the terms of the acquisition of Cordelia and Robertson, Hines will provide asset management services while Arklife will continue to be the property manager for the buildings.
“These acquisitions reflect our continued focus on actively pursuing build-to-rent opportunities in Brisbane, as well as in other key Australian cities with strong fundamentals,” says David Warneford, the Australia and New Zealand head at Hines.
“Hines sees tremendous potential in Australian BTR for both investors and residents. It’s poised to offer stable cash flow and income growth while helping to meet the demand for quality rental housing in the country.”
Ontario Teachers’ Pension Plan, which is sponsored by the Government of Ontario and the Ontario Teachers’ Federation, has about C$30 billion ($32 billion) of investments in real estate globally.
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