0:09

Hello and welcome to Talking Property, our

0:12

CBRE podcast series where our team of experts,

0:14

our clients, and industry specialists share

0:17

insights into the way we live, work, and

0:19

invest through a real estate lens. I'm

0:22

Kathryn House, CBRE's Australian Communications

0:25

Director and I'm your host for this latest Talking

0:27

Property episode. Today we'll

0:29

be talking about the build-to-rent sector, which

0:32

is known as multi-family in the US. It's

0:34

an emerging asset class here and one

0:36

that's attracting significant interest from

0:39

both local and offshore investors and

0:41

a lot of industry attention given the current

0:43

housing crisis and the significant shortfall

0:45

of rental housing across Australia. BTR

0:48

involves blocks of apartments that are specifically

0:51

built to be leased rather than sold to individual

0:53

owners. These developments are

0:55

owned by a single investor and often provide

0:58

more services and amenities for their tenants

1:00

who are treated as residents or customers.

1:03

It's still early days for the sector in Australia

1:05

with about 30,000 apartments operating

1:07

or in the pipeline across the country, but

1:10

there's huge potential with forecasts the sector could

1:12

grow to as many as 150,000

1:15

apartments within 10 years - if

1:17

we get the playing field right. This

1:19

would help alleviate current housing supply pressures,

1:22

provide quality long-term accommodation

1:24

for renters, and bring a range of social benefits,

1:27

both from a sustainability perspective and

1:29

via the sense of community that BTR facilities

1:32

foster. It will also help

1:34

cater to higher population growth forecasts,

1:36

factoring in Australia's revised net overseas

1:39

migration targets given most of these

1:41

migrants arrive in our three biggest cities

1:43

and 70% are renters. So

1:47

to talk about the opportunities, some of the current

1:49

challenges and the future market outlook,

1:52

I'm delighted to be joined by Mirvac

1:54

Fund Manager and BTR Sector Lead, Angela

1:57

Buckley, and by the Pacific Head of CBRE's

1:59

Living Sectors Capital markets business, Andrew

2:02

Purdon. Thanks for joining me today.

2:04

Hi Kathryn.

2:04

Morning Kathryn. Great to talk to you.

2:06

Perhaps to set the scene, Mirvac

2:08

has been one of the pioneers of BTR in Australia

2:10

through its LIV brand , having already

2:12

developed two assets, one in Sydney and

2:15

one in Melbourne. In fact, Ange, you are

2:17

joining us today from the podcast studio in your

2:19

Melbourne complex, Liv Monroe at Queen

2:21

Victoria Market. Mirvac also

2:23

has another three developments under construction. Ange,

2:26

could you talk us through why Mirvac decided to

2:28

target this market sector and what your

2:30

longer term vision is?

2:32

Well, Kathryn, I think like most

2:34

hopefully sound business decisions, this

2:37

has really been driven about solving a customer

2:39

problem. And I

2:41

think that especially when we think about the rental

2:43

market in Australia, the size

2:46

of it, just the fact that in

2:48

our inner cities, one in two people rent

2:51

and anybody who has rented will

2:54

typically have a story of not

2:56

necessarily a great customer experience. And

2:59

I think really when we combine

3:02

that as an opportunity, purely from

3:04

a customer perspective with some

3:06

of Mirvac's capability, so

3:08

we've been a residential apartment developer

3:11

for more than 50 years. That

3:13

capability has also expanded out to be

3:16

able to develop master plan communities,

3:18

medium density residential developments,

3:21

and being one of Australia's

3:23

largest diversified REITs and

3:26

owning and managing property across the office,

3:29

retail and industrial sectors. Combined

3:32

with the fact that we have in-house design

3:35

and construction capability as

3:37

well. I think all of those factors

3:39

really combine to say this is

3:41

something that we could really lend

3:44

our hand to in thinking about how to solve this

3:47

customer problem. And really the evolution

3:49

of it has been driven from there.

3:52

Fantastic. So Andrew, you have a long background

3:54

in the living sectors. Having worked in this area

3:57

for 10 years in the UK before relocating

3:59

Down Under last year. The

4:01

UK is well ahead of us in the development of BTR

4:04

projects with approximately 125,000

4:07

apartments completed or under construction.

4:09

However, the sector is still a tiny fraction

4:11

of the overall housing market there around

4:14

0.6% by value. Are

4:17

you seeing many similarities in the way the sector is

4:19

evolving in Australia? And what can we learn

4:21

from both the UK and the US where

4:23

BTR is even more advanced, accounting

4:25

for about 14% of their housing stock

4:28

by value?

4:29

Well , it's interesting for me, Kathryn, as a

4:31

relatively new arrival into Australia. I

4:34

arrived here in May last year, but

4:36

when I looked at the Australian market

4:38

through the lens of somebody that's

4:41

been operating in the rental sector in

4:43

the UK, it has huge similarities. If

4:46

you think about the customers first, as

4:48

Ange alluded to in both

4:50

countries, the UK and Australia, we've

4:52

had a noted period of

4:55

increase in percentage of renters in our population.

4:57

So in both countries about a third of people rent

5:00

and of course in Australia, given that

5:02

the market for build-to-rent, so purpose design

5:05

buildings is so new, we have virtually

5:08

no purpose design, purpose built

5:10

and operated, professionally managed rental

5:12

accommodation for those people. So you

5:15

know, from the customer standpoint, which is where we

5:17

all start with our thinking around this,

5:19

there's a huge need for the product. The

5:22

similarities are quite obvious with the

5:24

UK. Both countries have

5:27

a very expensive home ownership model,

5:29

both countries, you know, it's hard

5:32

for people to buy their own homes,

5:35

which is what's really fueled the

5:37

increase in renters in both countries. And

5:40

the inner cities in particular are just growing exponentially.

5:42

So you think about the population growth in

5:44

Australia, which is forecast over the

5:47

next five years, you know , the government's

5:49

target is about one and a half million more people coming

5:51

to Australia as new arrivals. And

5:53

those people we know tend to

5:55

start their lives in Australia in the inner cities

5:57

and renters. Which is actually really similar,

5:59

that urbanisation and population

6:02

growth in the inner cities is really similar

6:04

to some of the UK cities. So,

6:07

you know, it is a bit like history repeating itself

6:09

when I look at the Australian market and how it

6:11

will grow over the next five

6:13

or 10 years. To answer another

6:16

part of your question on the US, the

6:18

US is such a huge country by population

6:20

and the market has evolved over a

6:22

25 year period. So it's

6:24

quite difficult to draw the same parallels

6:27

as Australia and the US. But

6:29

one of the things I'm sure we'll talk about today in the US what

6:31

we've seen is the evolution of

6:33

different styles of rental accommodation

6:35

to service different cohorts of renters.

6:38

So over time, I'm sure Angela will have

6:40

views on this, I'm sure we'll see diversification

6:42

of typologies of rental housing in

6:44

Australia, but right now that the

6:46

main market activities in the inner cities.

6:49

Yes. And I think we were talking

6:51

about it earlier, but you've, you've had your own experience

6:54

with having to try and rent in Australia.

6:56

So you're coming at it with some

6:58

good knowledge there.

7:00

I am. I'm a recent immigrant and a renter,

7:02

so I suppose I tick a couple of boxes there.

7:05

Absolutely. So there has clearly

7:07

been a huge amount of investor interest

7:10

in Australia's BTR sector. So

7:12

this was evidence last month when Mirvac established

7:14

its new $1.8 billion build-to-rent venture

7:17

with some well capitalised cornerstone

7:19

investors, including the Clean Energy

7:21

Finance corporation. A question

7:23

for both of you as Andrew, I know you jointly

7:25

advised Mirvac on the capital raise for that. What's

7:28

underpinning this investor interest and

7:30

which investor types are the most active in this space?

7:33

Yes, so I mean the thing that's really underpinning

7:35

the investor interest and it is not just

7:38

overseas investors, but domestic too, isn't

7:41

an acknowledgement of the fundamentals that drive

7:43

the sector. So it's about population growth, it's

7:46

about an unsatisfied need from

7:48

the customers, but also it's about

7:51

driving solid rental returns

7:53

and capital growth through real estate investment.

7:56

And that the residential market at the moment looks

7:59

quite different to a number of the other commercial

8:01

markets, which is where the majority

8:03

of investment activity has been

8:05

in Australia over the last 20,

8:08

25 years. So think about offices and retail

8:10

and logistics as the three core sectors

8:13

for most investors in Australia, the

8:15

fundamentals behind some of those sectors

8:18

are a bit different. They're a bit more challenged than

8:20

residential. So that's why the capital markets

8:23

and the long-term investors are really looking

8:25

at rental housing now as a diversification

8:28

play and an area to get

8:30

those really solid investment returns that they

8:32

need for their shareholders or their members.

8:35

Absolutely. And Angela, what did you find during that

8:37

capital raise process?

8:40

I'd echo a lot of what Andrew has said. I

8:42

think the other two points that I would just

8:44

add is that there's also

8:46

I think a really strong alignment with

8:49

residential investment in

8:51

achieving ESG outcomes as

8:53

well. And I think we definitely saw that with

8:56

the recommitment to the platform from

8:58

the Clean Energy Finance Corporation and

9:01

that the recognition that we are so early in

9:03

the journey in build-to-rent in Australia. And

9:06

because the product needs to be developed

9:08

out and it is fundamentally

9:11

people's homes as well, there's

9:13

a really strong opportunity to deliver fantastic

9:16

environmental outcomes as we

9:19

propel towards decarbonising the economy. Mostly

9:22

of which is very hard to achieve in a typical

9:24

residential setting, but also

9:27

the importance of the S and

9:29

the G in ESG as well. And

9:32

that these communities that

9:34

we're creating are actually really leaning

9:36

into the social sustainability theme

9:38

and able to address some of the

9:41

social issues that we face, particularly around

9:43

loneliness and a lot of those

9:46

core needs that we have as humans that

9:48

often aren't addressed in the housing market

9:50

as well. And that if all of that can

9:52

be delivered by responsible

9:55

institutional investors who are

9:57

looking to make, you know, a positive impact

10:00

over the longer term, then there's

10:02

a really strong alignment with the growth of the

10:04

sector to ESG as well .

10:06

Absolutely. I mean it's interesting that you talk about that sort

10:08

of the E and the S. There's

10:10

maybe a little bit of a misconception in some spheres

10:12

that BTR is purely this sort of top end exclusive

10:15

product, but I was looking at your LIV

10:17

website and some of the resident interviews on

10:19

there and there's everyone from students through

10:22

to DJs, marketing managers, interstate workers

10:24

who are using the apartments as a crash pad. And

10:26

there's this common thread when you look at

10:28

the interviews with people talking about the sense of community

10:31

that they feel, including there was one person

10:33

who set up a fruit and vegetable co-op to help other

10:35

residents with the price of living going up. So

10:38

perhaps you could talk us through a little bit more about some of these societal

10:41

benefits you're seeing and I guess some of the other

10:43

reasons why people are gravitating towards

10:45

BTR living.

10:47

Well, I think it's no secret that it's really tough

10:49

to be a renter in the sense that the

10:52

whole system today is

10:54

really geared around a pretty

10:56

inefficient way to procure

10:59

a home. Whether that's the initial

11:01

contact that you have when you're trying to

11:03

actually find a home, the fact that it's relatively

11:06

fragmented. You are dealing with often

11:08

one real estate agent for one single

11:11

apartment and lining up for open

11:13

for inspections for, you know , 40

11:15

minutes and hoping you are the one that is chosen.

11:18

So right from that first touch point

11:20

, pretty much all the way through the journey,

11:22

our system's really been set up largely to

11:25

support the landlord much more than the

11:27

tenant, even though I don't usually use that word.

11:30

And that goes to the fact that it's not

11:32

seen as a really desirable living

11:34

option for people today. You are almost

11:36

sort of a second class citizen if goodness you're

11:38

a renter - sorry to say that Andrew as a new immigrant.

11:41

But realistically, you know,

11:43

we are talking about everyday Australians and you

11:46

listed a few that do live with us and

11:49

it is about addressing a very broad audience.

11:51

If one in two people in the part

11:53

of our cities are renting, then we

11:55

all know renters. And this

11:58

means that there's this hugely unaddressed

12:00

audience. And when you

12:03

combine that with, as Andrew said,

12:05

professional management that really focuses

12:08

on the tenant as the customer, everything

12:10

that we do is all about wanting

12:13

people to live with us for as long as it suits

12:15

them. If that is a long time, if they want

12:17

that to be five, seven years, then we

12:19

will happily accommodate that. Or

12:22

if they are being relocated for work for six

12:24

months and need somewhere to live, then we'll also

12:26

accommodate that. But it's putting that choice

12:28

back in the renter's hands

12:31

and there's this really strong

12:34

focus from us about really wanting

12:36

this to be a genuinely new

12:38

category of housing. So bringing together

12:41

some of the benefits that do exist in the rental market,

12:43

like flexibility perhaps of a shorter term

12:45

lease, but also the sense

12:48

of security that you often only get

12:50

from in Australia owning your own home.

12:53

So that can be not just

12:55

security of tenure, that could be the fact that we

12:57

encourage people to really make the

12:59

home their own. So we

13:02

are happy for people to bring their pets and their children.

13:05

We're happy for people to paint

13:07

their walls, to hang pictures, to

13:10

really get that strong sense of belonging

13:12

and also individualism as well. And

13:15

to know your neighbors. And when

13:17

you have that ability to have a

13:19

sense of security, whether that be from

13:22

the tenure of the lease or the fact that you know

13:24

that your landlord is a professional

13:26

manager who doesn't want to sell that unit in

13:29

six months, or whose daughter might

13:31

be relocating for university and want to move in

13:33

there, then you get to deal with,

13:35

you know, a very different approach in

13:38

that everybody's on an equal playing field.

13:40

Everybody is a renter. There is no

13:42

hierarchy between the owners and the renters

13:44

in the building because everybody's equal.

13:47

And therefore you are genuinely

13:50

changing the game around what

13:52

an inner urban living experience

13:55

can be. And we design

13:57

the buildings for living. They're

13:59

not designed to maximise private

14:02

space, which is typically them driving

14:04

capital value. This is about

14:07

designing for a living experience

14:10

that is sustainable in the long term .

14:12

Fabulous. And I know Andrew, you often talk about the societal

14:15

benefits as well. I mean, what did you see in

14:17

your, you know, time in the UK about how that sort

14:19

of played out?

14:20

Well, I think probably the starting

14:23

point for this is that we, we all in the industry,

14:25

we fully acknowledge and understand the

14:27

benefits of build-to-rent. But actually

14:30

communicating it to customers who haven't

14:32

experienced it before is a slightly different

14:34

challenge. So Ange, I'd love to hear your views on when

14:36

you've engaged with customers and you've

14:38

been leasing up a big building like LIV

14:41

Munro. To what extent are the

14:43

customers pre-wired and a bit cynical

14:45

about what your promises are as

14:47

the operator of the building?

14:49

There's definitely a healthy level of skepticism

14:52

and I think that's been driven by the fact that

14:54

renters typically aren't treated as customers.

14:56

So, and therefore,

14:58

you know, there's this tension that

15:00

exists between the traditional

15:03

landlord and tenant relationship. But

15:05

once we're able to, I think

15:07

really demonstrate some of those benefits

15:10

and people are able to see it with their own eyes and

15:13

when you walk into the building, people will say

15:15

hello to you or say hello to each other. I

15:17

love the story in the last couple of weeks that

15:20

we host Friday night social

15:22

drinks each fortnight as one of our one

15:25

of many resident engagement opportunities.

15:28

And that's been relocated down to the lobby of

15:31

the building up from our level 39

15:33

amenity because people wanted to bring their pets.

15:35

So I think last Friday I think

15:37

there were at least five cats and

15:40

I think 10 dogs all enjoying

15:42

Friday drinks. And it

15:44

sounds atypical because I

15:46

also live in an apartment building and I can't imagine that

15:50

probably happening because it's not geared

15:52

to either. And so I

15:54

think it is that first leasing experience

15:57

is obviously really important, but it's

15:59

also the ongoing kind of enduring

16:01

experience that we are committed

16:03

to delivering as well that I think will

16:05

make the difference long term .

16:07

And I think one of the very few positive

16:09

things that came out of Covid is that people really

16:12

value community in a different way. Now

16:14

if you, if you think back to when we're all locked down in

16:16

our houses and how we all got to know our neighbours

16:19

and we have the street WhatsApps and that sort of thing,

16:21

people realise that, you know, in our busy

16:23

lives that we all lead, having that

16:25

richness of relationship with neighbours

16:28

and community is hugely

16:30

beneficial and valuable and we probably undervalued

16:32

it pre-covid. So to

16:34

answer your question around, you know, what have we

16:36

seen in the UK and what's happening in Australia? I

16:39

think BTR customers and

16:41

residents, they are big advocates

16:44

and fans of the place that they

16:46

live and Ange you've seen that within your buildings,

16:49

you know, they're very proud of where they live and

16:51

they love hanging out with their neighbours and getting to

16:53

know and engage with the community. And that's

16:55

the social benefit in many ways, it's connecting people

16:57

up. And it's not only accessible

17:00

as well to people who are earning the highest salaries

17:03

in the cities. Our analysis shows

17:05

that quite consistently across the

17:07

east coast cities of Australia, the

17:09

entry level for somebody to live in a build

17:11

to rent building is probably somebody, if

17:14

they're , particularly if they're sharing something between 50 and

17:16

$60,000 per annum as income, you

17:19

look at that relative to median salaries is

17:21

it's well below median salary and a

17:24

huge broad range of job types

17:26

can access that sort of rent. So it

17:28

is a a different lifestyle offering. We

17:31

believe that it's much, much better than the private rental sector,

17:34

a richer better life to live

17:37

in an in urban environment for sure. And

17:40

um, it's very accessible for lots and lots of people.

17:42

So it's great.

17:43

I'd add to that Andrew , I think that the

17:45

other part is it does go back to that design

17:48

point that the mix that we

17:50

would typically create across be

17:52

it studios, one bedroom , two bedroom

17:55

or three bedroom apartments, often

17:57

people have a traditional mindset of what

18:00

you do with those one or two bedrooms that

18:02

you rent as well. And we

18:04

are very much thinking about how

18:06

to maximise the utility of

18:09

all of the spaces that we have, which includes

18:11

a private space but also within someone's

18:14

apartment, but also how that can

18:16

be complemented by additional

18:18

space that might be shared. So here

18:21

at LIV Munro, I've just come from the coworking

18:23

space, there's 18 sit

18:26

to stand desks, there were a

18:28

crowd of people in there this morning that have all booked

18:31

a spot for the day as well. There

18:33

are variety of meeting rooms that are also

18:35

being used as well and the

18:37

multimedia rooms that people are using

18:40

for a variety of different reasons. They might be

18:42

having their friends over to watch

18:44

a movie together or even

18:46

play karaoke or play a musical

18:48

instrument and not bother their neighbours as well.

18:51

And again, it's just redefining what

18:53

that living experience actually looks

18:55

like and the different ways to use spaces.

18:58

That can also happen when people's

19:01

circumstances are changing. We

19:03

had a lady who was living with her adult

19:06

daughter who's moved overseas for 12 months

19:08

and she's moved from a two bedroom to

19:10

a one bedroom on the same floor and

19:13

that, you know, she said it's really difficult to be

19:15

able to do that elsewhere. So it's about creating

19:18

again, more choice for people and

19:20

more certainty at the same time.

19:22

Yes, that's fantastic. And not having to engage

19:25

a mover. You could just carry her

19:27

things to the next apartment . So

19:29

we've talked about the opportunities, but I

19:31

guess we really should talk about some of the potential challenges

19:34

for the sector as well. One would be the

19:36

Green's opposition to the Albanese government's

19:39

$10 billion housing fund unless the government coordinates

19:41

with the states to impose a two year national rent freeze

19:43

. At the same time the Andrews government

19:45

in Victoria is mulling a package of housing measures,

19:48

which may include rental controls. So

19:50

a question for both of you. What impact

19:52

could these types of rent controls have on the sector's growth?

19:55

Well I think the starting point on

19:58

this one, Kathryn, is that proposed rental

20:00

reforms, and we don't know really what the

20:02

Andrews government is thinking about at this stage

20:04

in detail, but it's much broader

20:07

than BTR. So we'll sort of talk

20:09

about it from the sense of consumer

20:12

outcomes and customer outcomes, renters,

20:15

and then why do we talk about the impact that

20:17

it could have on build-to-rent specifically

20:20

is a very small part of the overall housing

20:22

market in Australia. So

20:24

Ange, I mean we talk about this quite a lot that way the

20:26

risks and the headwinds that we all face at the moment

20:28

in the sector. It's unrealistic

20:31

to say that the BTR market, the institutional

20:33

investment market is anti-reform, but

20:36

let's just talk about what reforms would

20:38

be positive for customers potentially and and

20:40

we can talk about others that would really impair

20:43

investment into the sector.

20:45

Yes, I agree. I think, think rental reforms broadly

20:48

can actually be really positive in creating

20:51

that certainty that we talked about for the

20:54

customer but also for investors as well. And

20:56

some of the reforms we know are on

20:59

the table delivering on

21:01

outcomes that actually already exist in the build-to-rent

21:04

market . So it's bringing up the standard

21:06

of renting more generally

21:09

when we're talking about things like security

21:11

of tenure, which of course build-to-rent already

21:13

provides. When we're talking about no fault

21:15

evictions, which again, build-to-rent already provides.

21:18

In New South Wales the introduction of a portable

21:20

bond scheme, which we actually

21:23

don't charge our customers a bond.

21:25

So those sorts of reforms are actually

21:27

really positive and I think it's

21:30

very clear to say that investing

21:32

into a sector, whether you are

21:35

a superannuation fund or an

21:38

international investor or even a

21:40

mum and dad investor, what you're

21:43

really looking for is clarity

21:45

and certainty and the ability to

21:47

operate in the free market as well. And

21:50

I think there are already some signs that some

21:52

of the proposed reforms that we're seeing are

21:55

taking away some of that certainty and therefore,

21:58

even mum and dad investors are

22:00

starting to show signs of exiting

22:03

the market. Today when you look at

22:05

the proportion of listings that are on

22:07

the market in Australia, investors

22:10

represent the largest proportion that they

22:12

have in more than a decade, which

22:14

I think is one of the signs that the

22:17

risk of that certainty will actually

22:19

stifle investment. And

22:22

it seems logical that a rental cap can be

22:24

a good thing for a customer, but in

22:26

every market internationally that we've

22:28

looked at where either rent stabilisation

22:31

or rent controls are in place, there's

22:33

a direct link to inferior

22:36

customer outcomes because you're capping

22:39

the equity upside investment,

22:41

you are also less inclined

22:44

to invest in the repairs

22:47

and maintenance or the capital investment of a building

22:50

and it's very clear as well

22:52

that supply actually becomes crimped

22:54

from such measures being in place. And

22:57

with the market where it is today and if you

22:59

look over a 5,

23:01

10, 15 or 20 year period, the best

23:04

way to have less

23:06

volatility in the market and

23:08

growth that is more akin to inflation

23:11

is to actually encourage supply.

23:14

And we really are at the point where we

23:16

need to incentivise supply

23:18

in the short and medium term for our cities.

23:22

So Andrew, what is going to stimulate

23:24

supply in the BTR sector?

23:26

Well, as we've talked about already, Kathryn, the

23:28

fundamentals and the tailwinds behind the sector

23:30

are really positive and Australia

23:34

in many ways is a standout market in

23:36

the world, not just in APAC but around the world

23:38

in terms of the attractiveness to invest

23:40

in the sector. But we need to make sure that

23:43

all the policies are incentivising

23:45

investment rather than impairing

23:47

investment. So we definitely need certainty

23:50

of thinking from politicians at state

23:52

and federal level. Obviously,

23:54

there was huge excitement at the last federal

23:56

budget, the announcement of changes to MIT tax,

23:59

which has really caught the attention of the global

24:01

investment community and attracted new

24:03

investment or prospective investment into

24:06

Australia. So we need consistency of

24:08

thoughts and policy at state level too

24:10

. A lot of our clients talk

24:12

about challenges of getting planning

24:14

permits for delivering. So the states seem

24:16

to be alive to that. They try to accelerate planning

24:19

processes and give investors more certainty

24:21

through planning outcomes. And

24:23

that's the same that we need to see that that mentality

24:26

of incentivisation and providing

24:28

certainty needs to percolate through

24:30

all forms of government policy to

24:32

help the market grow and to help investors invest.

24:35

I think Andrew also there's a real opportunity to

24:38

partner with government as well. We've

24:40

got an example in Queensland where we're

24:43

delivering a project which incorporates

24:45

affordable housing. So 25% of the

24:47

396 apartments will be dedicated

24:50

to key worker affordable apartments

24:53

and that's over a minimum 15 year

24:55

period of time. So there's

24:57

also partnership opportunities, which

24:59

I think could also help to stimulate supply

25:02

when, to your point, if we get the policy settings right.

25:06

Absolutely. So one

25:08

last area I'd like to explore with you both is

25:10

that the other types of rental models that investors

25:13

are exploring in Australia. So we've talked a lot about

25:15

BTR, but you know, there are things like family

25:17

housing, single person households,

25:20

affordable and social housing. Ange,

25:22

are these areas that Mirvac's looking at? And

25:24

I guess a question for both of you, what's

25:26

going to be instrumental in driving the growth of

25:28

these types of housing models in Australia?

25:31

Look, I think I would say mvac generally

25:33

has really strong conviction around the

25:36

living sector and whether

25:38

that be across residential build-to-sell

25:41

in apartment format or residential

25:44

subdivisions or even medium density build-to-sell

25:46

style developments, that we

25:48

believe that there's a really big

25:51

role to play in the market in that going forward.

25:54

But it's taken us six years

25:56

to really establish the platform

25:59

that we have with Liv and creating

26:02

an institutional rental model. And

26:05

I think what we've really got conviction about

26:07

is that potential expansion of that

26:10

going forward would seem like the next

26:12

natural adjacency for us as well. There's

26:15

a very broad range of

26:17

customers to address in this market and

26:20

being able to operate across the continuum

26:22

I think is, you know, a natural opportunity

26:25

that we're continuing to explore.

26:27

Andrew?

26:28

Yes, so we're starting to see some

26:31

different styles of rental housing

26:33

business plans emerge in Australia. Back

26:36

to what I said before, the US has

26:38

the most segmentation within the

26:40

market. Everything from high-end CBD

26:43

style rental housing to inner ring to

26:46

what they call worker housing, which is more affordable

26:49

products. And then single

26:51

family housing, which as described

26:53

is master plan community style

26:55

housing for families, people with children, you

26:58

know, near schools or things. So what

27:00

we know is that the

27:02

investors quite open-minded

27:04

around the type of accommodation that they're

27:06

investing in, that they're consistently looking

27:09

for those stable income streams,

27:11

which all those types of housing can provide.

27:14

So I think as Ange says, really, I think build-to-rent will

27:17

continue to drive the market in Australia, but over the

27:19

next three to five years, I think we'll start

27:21

to see clear segmentation and

27:23

multiple outlets for businesses

27:26

like Mirvac and others who

27:28

can deliver on planning and

27:30

design and construction and management

27:32

and service a different cohort of customers.

27:35

Co-living is an example of something

27:37

that I'm very passionate about. That's effectively

27:40

purpose built rental housing

27:42

for singles. And if you look

27:44

at the demographic trends in the Australian

27:46

cities, the single person household

27:49

is the largest growth household in

27:51

the market and those people

27:53

aren't generally accommodated

27:55

with purpose designed housing. So

27:57

there's a clear customer need there and

28:00

I'm sure we will see those sorts of buildings

28:02

developed in the very near term in Australia.

28:04

It's hugely exciting.

28:06

It's a very exciting time for the housing market,

28:08

I think , despite all the current challenges.

28:11

So thank you so much for your time,

28:13

Angela and Andrew. I think there's so much

28:15

more we could have explored today and I think

28:18

we might have to do a part two on this down the track.

28:20

So clearly the build-to-rent sector is one to

28:22

watch and it's going to be exciting to see how this evolves

28:25

in Australia over the next decade. Thanks

28:27

for tuning into this latest episode of Talking Property

28:30

with CBRE. If you like the show

28:32

and want to check out more, visit cbre.

28:34

com.au/talking-property or

28:37

subscribe through Spotify and Apple Podcasts.

28:40

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28:42

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28:44

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28:47

Until next time,