Australian Real Estate Fund Manager Qualitas and multi-billion-dollar developer GURNERTM have announced a partnership to enter the multi-family housing sector and the imminent launch of capital raising for a dedicated Fund for the sector. The Fund will boast an initial pipeline of three seed projects with total value of over $1bn, in prime inner Melbourne locations with construction commencing in Q1 2021 for the first investment.
With the partnership covering the eastern seaboard of Australia and New Zealand, GURNERTM and Qualitas aim to become one of Australia’s largest multi-family housing players in the next 12 – 24 months with the platform focused on the deepest part of the Australian rental sector, being product rented by professionals with a focus on amenity and service.
The partnership will allow Qualitas to launch a new multifamily fund vehicle to provide investors both domestically and internationally access to a portfolio of quality inner urban multifamily assets developed and operated by GURNERTM.
The joint venture sees both groups focusing on their core skills-sets with GURNERTM as developer responsible for design, construction and project development, as well as appointed as the operator of completed assets, and Qualitas assuming the roles of fund manager and transaction structuring. Given the growth aspirations for the portfolio, both groups will source assets for the partnership.
The move comes just months after GURNERTM and Qualitas announced a $150 million equity partnership for traditional build-to-sell residential development.
This joint venture will expand that partnership with GURNERTM and Qualitas now actively seeking opportunities to grow the pipeline of both build-to-sell and multi-family housing projects.
Having closely monitored and analysed the sector over the past two years, GURNERTM’s expansion into the multifamily housing sector comes at a time when the developer believes the asset class can sit alongside traditional build-to-sell residential development in Australia in terms of financial returns and add diversity to larger developers like GURNERTM.
Qualitas has been active in the multifamily sector over recent times, having identified the opportunity in Australia in its nascent stage. Qualitas has invested in Multifamily in the US as well as launching Australia’s first dedicated Build-to-Rent debt fund to make loans to the sector backed by an Australian institutional investor.
The firm considers the local post-COVID-19 environment conducive to the growth of the multifamily sector and had been seeking a top-tier local development partner to work with to capitalise on the opportunity.
The Australian multifamily opportunity is considered overwhelmingly compelling having regard to the strong underlying demand fundamentals for quality product combined with low long-term interest rates and new government support for the sector coming via land tax discounts and other incentives. This backdrop is enhanced by the looming apartment supply shortage across Australia’s major capital cities.