The biggest renters only tower in Australia has just been finished in Docklands by developer LendLease, and it comes with a wild array of features including a gym, podcast room and its own bowling alley. Soliday Chuon enjoys the in-house ten pin bowling alley. Picture: David Caird
A tenants-only apartment boom that’s made Melbourne the Aussie capital for build-to-rent towers is shaping up as a key step in improving the quality of builds across the city.
While latest data suggests Sydney might be gaining on Melbourne with new approvals for build-to-rent, corporate landlords having to handle any defects with homes built are understood to be trying to minimise them wherever possible — potentially lifting standards beyond their own sites.
Australia’s biggest build-to-rent complex in a single tower was recently opened in Docklands, with a golf simulator and bowling alley on the list of amenities available to its tenant-only residents.
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And industry watchers believe it will continue an arms race of wild features intended to lure tenants into long-term tenure as renters.
BDO Australia project infrastructure and advisory partner Luke Mackintosh said Victoria continues to lead both supply and construction in the build-to-rent sector, but the market had flipped when it came to future approvals.
BDO Australia data shows built-to-rent approvals in Sydney for projects to be online by 2032 was 72 per cent higher than Melbourne.
Melbourne’s present built-to-rent supply is 10,341 units, compared to 1943 in Sydney.
Significant growth in construction and approvals show Melbourne would reach 24,765 units by 2032, and 17,250 in Sydney.
“Everyone wanted to be New South Wales, but they couldn’t make it work – land costs were high and planning timelines were prohibitive,” Mr Mackintosh said.
“What’s happened over the past few years however is that the environment in Victoria has really pushed out investors.”
Lendlease’s West Tower tenants-only complex has opened in Docklands.
A proactive New South Wales government has encouraged more construction, through land tax exemptions, more certain planning timelines and stronger demand to build in Sydney, he said.
“It’s a more positive environment to do business in. The tax surcharges, absentee owner taxes and stamp duty surcharges are combining to form a negative impact on housing in Victoria.”
Australian Apartment Advocacy founder Samantha Reece said there were some factors that suggested build-to-rent was changing the wider market in Melbourne.
“What we are finding interesting is that they (corporates) are now the ones copping the defects, rather than owner occupiers,” Ms Reece said.
With corporate clients able to exert more influence than the average owner-buyer, she said it was possible that they would wind up with fewer defects as a result.
Lendlease’s West Tower tenants-only complex in Docklands.
This could lead to an early wave of better quality apartments, ahead of government provisions to require an 18-month defect check for new builds that’s expected to start from June, 2028.
“That’s great news for Victorians,” Ms Reece said.
“It’s creating a legacy for apartment living that will make it much better than it has been up to this point.
“And I do believe that Victoria is well placed once those legislative changes come into place.”
Lendlease development executive director Adam Williams said Melbourne was still one of the best cities in the country for population growth and low vacancy rates, making it a prime spot for rental project development — especially near jobs, transport and education.
With tenants-only apartment complexes becoming a “core part of Australia’s housing mix” Mr Williams said there was scope for more to come.
“We’re investing at scale, with projects including West Tower, 899 Collins Street and a future development next to Queen Victoria Market,” Mr Williams said.
A golf simulator is among the activities at Lendlease’s West Tower tenants-only complex in Docklands.
With 2800 apartments for renters run by the firm across the US and Australia, he noted that the goal was to develop community-minded builds where residents wanted to stay longer term.
“Across our portfolio, we’re delivering high quality rentals with unique amenities ranging from bowling alleys and podcasting studios to pet wash facilities and wellness spaces,” he said.
“As the sector grows, we’ll continue to consider what features and amenities matter most to residents, whether that’s spaces to work, exercise or connect.”
AAA research conducted last year suggests they still need to convince the broader apartment market, with only 23 per cent of Victorians rating the facilities and amenities on the list of things they liked about their apartment and 26 per cent appreciating the community.
Meanwhile, 51 per cent rated carparking, and half of those surveyed had security as a key focus.
Lendlease’s West Tower tenants-only complex in Docklands.
The same research found that 90 per cent of the nation’s apartment households hosted only one or two people, with less than 1 per cent living with five or more people in the residence.
The majority of build-to-rent residences are leaning into this with most of the residences ranging from studios to two-bedroom homes and locations in the CBD or sought-after inner suburbs.
She added that the new wave of Melbourne build-to-rent developments had won a number of the group’s annual awards in recent years, with Local: Residential particularly recognised for having 10 per cent of their apartments offered to people with disability, women over 55 or key workers, ensuring it wasn’t just students and young professionals getting homes with easy access to yoga rooms and more stable tenure.
Mr Mackintosh said though the build-to-rent sector represented a small percentage of housing stock, it would make an impact in areas where younger people typically look to rent.
“Eighty per cent of tenants in build-to-rent tend to be under the age of 35 and it’s providing a greater diversity of product for that cohort.”
Additional reporting Peter Farago
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nathan.mawby@news.com.au
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