)
US real estate investor and developer Pembroke has laid plans for a new build-to-rent (BTR) project in Melbourne’s inner north after acquiring a major commercial site which it plans to transform into about 200 residential units.
Pembroke, a private company backed by fund manager Fidelity Investments and venture capitalist Eight Roads, says the proposal is the latest step in its diversification strategy to build a portfolio of residential, mixed-use and office properties in major urban markets globally.
The development is proposed for a 2,600sqm site at 155 Johnston Street in Fitzroy which is currently occupied by a two-level commercial building.
Pembroke, which also owns the T&G building at 161 Collins Street in Melbourne’s CBD which it acquired for $275 million in 2015, has not disclosed the price paid for the Fitzroy property.
The US group is progressing plans for the site which is planned to comprise more than 200 units across 11 levels, along with residents’ amenities such as a rooftop BBQ area, lounge and co-working facilities, a gym, bike storage, basement parking, and a ground-floor garden and courtyard.
Pembroke says its BTR proposal is aimed at capitalising on demand for residential housing in inner Melbourne while leveraging growth in the BTR sector in recent years which has led to a swath of developments from major offshore players such as Sentinel and Greystar, as well as local groups such as Gurner and Lendlease (ASX: LLC).
"Addressing a chronic shortage of housing is high on the Australian Government's agenda, and the BTR market in particular offers huge opportunity for us at Pembroke as we double down on our global diversification strategy,” says Joe Fitzpatrick, Pembroke's regional director for Australia.
“As global city specialists, Pembroke has a proven track record of delivering thoughtfully developed, high-quality, urban properties, and we're thrilled to bring this expertise to the Australian residential sector.
“Strategically this acquisition establishes a strong foothold for Pembroke in the Australian BTR market."
Pembroke has engaged Greystar, a fellow US-based company and the group behind one of Australia’s biggest BTR projects, to deliver its master plan for Fitzroy as project manager.
"There is an urgent need for attainable and high-quality housing options in Australia, particularly in the city of Melbourne,” says Matt Woodland, Greystar's Australian managing director.
“As one of the world's largest estate companies with deep expertise in property development and management, we are excited to deliver this project for Pembroke, which will bring more housing supply that offers the lifestyle and service experience that Australia renters want and need right now."
The South Carolina-based Greystar, which manages and operates close to $315 billion in real estate assets globally, last year opened the doors to its first BTR project in Australia, The Gladstone, a $500 million development at South Melbourne.
Pembroke, which has property assets in Europe, North America and the Asia-Pacific region, sees Australia as key to its diversification strategy and describes 2025 as a transformative year for the group in which it is seeking premium residential opportunities in major cities to add to its portfolio.
"The demand for high quality residential properties in the world's leading cities continues to rise,” says Jack Clark, senior vice president and head of investments at Pembroke.
“We are well positioned to respond to help meet this demand in Australia and globally, leveraging our strong capital base which enables us to close deals all cash and finance opportunistically later.
"We have a strong appetite for more residential development opportunities and are focused on the US, Europe and Asia Pacific, specifically in Seattle, Washington DC, Boston, London, Munich, Hamburg, Tokyo, Sydney and Melbourne."
Pembroke has been building its BTR portfolio through the recent acquisition of The Lark in London, comprising 195 units, and the Fitzroy near Washington DC which comprises 267 BTR units. The company says these assets are currently sitting at 95 per cent and 96 per cent occupancy respectively.
"At Pembroke we understand that people are choosing to live and work in amenity-rich environments,” says Fitzpatrick.
“The success of the T&G Building and 20 Martin Place in Australia are testament to how we deliver world-class amenity and an exceptional tenant experience, and we're looking forward to applying our city-focused expertise to the residential sector."
Pembroke has owned the 20 Martin Place office building in Sydney for more than a decade.
)
