Property Council reports strong growth in institutional housing investment
The build-to-rent sector is expanding, with institutional capital and completed assets now providing a clearer view of the market's performance, new data from the Property Council/MSCI Australia Build-to-Rent Property Index has shown.
The index currently tracks 13 funds, 44 assets and 25 developments, representing a combined capital value of $10 billion.
Matthew Kandelaars (pictured top left), group executive of policy and advocacy at the Property Council, said the figures point to the ongoing expansion of build-to-rent as a significant segment of Australia's housing supply.
"Build-to-rent has arrived, and together with other institutional housing models will play an important role in delivering more high-quality rental homes for Australians at scale," Kandelaars said.
"Institutional investors are looking for markets where they can invest with confidence. Better data, greater transparency and more mature investment settings all help attract the long-term capital needed to deliver more housing."
Ben Martin-Henry (pictured top right), head of private assets research, Pacific at MSCI, said the index fills an important gap in local market data.
"This index closes a significant data gap in the Australian market," Martin-Henry said. "For institutional investors evaluating BTR as a standalone allocation, or comparing it against established commercial property sectors, a credible performance benchmark has been a missing piece.
"These results show the sector holding its own against core real estate on a risk-adjusted basis, with a distinctive yield and cost structure that investors now have the data to properly underwrite."
The Property Council is calling on more industry participants to submit asset data to the index, aiming to broaden its coverage and reinforce Australia's standing as a destination for residential investment.
"Contributing to the Index not only improves market transparency but also sends a very strong signal that Australia's institutional residential market is continuing to mature," Kandelaars said.
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