OTPP and Hines Acquire a Build-to-Rent Portfolio in Australia
Ontario Teachers’ Pension Plan (Ontario Teachers’) and global real estate investment manager, Hines, have made a significant move into Brisbane’s growing Build-to-Rent (BTR) market. The recent acquisition of two BTR assets, totalling 354 units, aligns with the organisation’s strategic focus on expanding its multi-family portfolio in key Australian cities.
The Australian multi-family market, particularly in cities like Brisbane, is seeing rapid growth. Build-to-Rent properties are increasingly popular as housing demand rises alongside the country’s growing population. With more Australians leaning toward rental properties, the Brisbane real estate market is poised for continued expansion.
These recent acquisitions by Ontario Teachers’ and Hines exemplify the potential within the Brisbane property market, driven by strategic, amenity-rich asset.
The acquisitions align with Ontario Teachers’ Real Estate’s Living strategy, which targets high-quality assets in prime submarkets with access to transport, employment hubs, and entertainment. The two Brisbane-based properties are designed to meet modern tenant needs while adhering to sustainable development principles.
Robertson Street, Fortitude Valley
28 Robertson Street is an 89-unit BTR asset located in Fortitude Valley, one of Brisbane’s most vibrant neighbourhoods. Completed in October 2021, this property quickly stabilized within six months of operation.
Key features of the building include:
- Usage of renewable energy
- Stormwater recycling
- High-performance acoustic glazing
- Low-energy LED lighting
This sustainable approach appeals to environmentally conscious renters and supports Brisbane’s green initiatives, making Robertson a desirable location for tenants.
Cordelia Street, South Brisbane
13-17 Cordelia Street in South Brisbane is set to deliver 265 premium BTR units, with practical completion expected in early 2025. Located in one of the city’s most sought-after areas, Cordelia offers top-tier amenities designed to cater to modern living needs.
Some standout amenities include:
- Rooftop pool
- Fully equipped gym
- Residents lounge and co-working spaces
- Private dining room
- Sky garden with stunning city views
Cordelia is targeting a 5-star Greenstar rating and aims for a 7.0 Energy Performance Rating under the Nationwide House Energy Rating Scheme (NatHERS). These eco-friendly features not only appeal to tenants but also align with the broader demand for sustainable living solutions in Brisbane.
The BTR sector is thriving due to the growing demand for quality rental housing. Jun Ando, Head of Asia-Pacific Real Estate at Ontario Teachers’, highlights, “With Australia’s population expected to see continued growth and consumer preferences moving towards the rental sector, we see strong, long-term potential in the Australian multi-family market.”
David Warneford, Country Head of Australia and New Zealand at Hines, added, “These acquisitions reflect our continued focus on actively pursuing Build-to-Rent opportunities in Brisbane and other key Australian cities. We see tremendous potential in Australian BTR for both investors and residents.”
Brisbane’s BTR market is perfectly positioned to meet the increasing demand for rental properties, particularly in areas close to transport links and employment hubs.
Sustainability and Innovation in the Build-to-Rent Sector
Sustainability is a key aspect of both Robertson and Cordelia. As tenants increasingly seek eco-friendly housing, these properties incorporate cutting-edge sustainability measures. From renewable energy use at Robertson to Cordelia’s aim for a 5-star Greenstar rating, both projects reflect a commitment to long-term environmental impact reduction.
With these properties, Ontario Teachers’ and Hines are not only delivering high-quality rental housing but also leading the way in sustainable property management in Brisbane.
The Role of ADCO Group and Arklife in the Acquisition
The vendor of these Brisbane BTR assets is the ADCO Group, a leading construction and property group in Australia. ADCO managed the projects through its specialized BTR platform, Arklife, which will continue as the property manager for both Robertson and Cordelia. Hines will oversee asset management services, ensuring both properties deliver long-term value for investors and tenants.
Strengthening Brisbane’s Real Estate Market
This acquisition marks a significant milestone in the Brisbane real estate landscape. With a focus on sustainability, tenant-centric amenities, and premium locations, Ontario Teachers’ and Hines are set to shape the future of the Build-to-Rent sector in Australia. As demand for rental properties grows, these new developments will provide much-needed housing options in key Brisbane areas.
Brisbane’s BTR market is emerging as a robust investment opportunity, benefiting tenants, investors, and the local economy.
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On Tuesday, Ontario Teachers' issued a press release stating that it and Hines acquired Build-to-Rent portfolio in Australia:
AUSTRALIA – October 1, 2024 – Ontario Teachers’ Pension Plan (“Ontario Teachers’”) and Hines, a leading global real estate investment manager, have completed the acquisition of two Build-to-Rent (“BTR”) assets in Brisbane totaling 354 units.
The acquisition aligns with Ontario Teachers’ Real Estate’s Living strategy in Australia, which targets amenity-rich assets in vibrant submarkets close to transportation links, employment hubs, and entertainment centers. The assets comprise:
- 28 Robertson Street located in Fortitude Valley (“Robertson”): Robertson is an operational 89-unit BTR asset. The building was completed in October 2021 and stabilised within 6 months of operations. Robertson’s ESG features include the usage of renewable energy, storm water recycling, high-performance acoustic glazing and low-energy LEDs.
- 13-17 Cordelia Street in South Brisbane (“Cordelia”): Cordelia is a 265-unit premier BTR asset that is expected to reach practical completion in Q1 2025. Cordelia will deliver top-of-the-line amenities such as a gym, rooftop pool, residents lounge, co-working space, private dining room, and a sky garden. Cordelia will target a 5-star Greenstar rating and a 7.0 Energy Performance Rating under the Nationwide House Energy Rating Scheme (NatHERS).
Jun Ando, Head of Asia-Pacific Real Estate at Ontario Teachers’ Pension Plan, said: “With the Australian population expected to see continued growth and consumer preferences in the country moving more towards the rental sector, we see strong, long-term potential in the Australian multi-family market. These assets provide us with a strategic entry point into Brisbane and, working alongside Hines and Arklife, we will look to offer a compelling value proposition for tenants and create value for our stakeholders through active asset management.”
David Warneford, Country Head of Australia and New Zealand at Hines added: “These acquisitions reflect our continued focus on actively pursuing Build-to-Rent opportunities in Brisbane, as well as in other key Australian cities with strong fundamentals. Hines sees tremendous potential in Australian BTR for both investors and residents. It’s poised to offer stable cash flow and income growth while helping to meet the demand for quality rental housing in the country.”
Ontario Teachers’ Real Estate believes that the multi-family and broader living sector benefit from strong macroeconomic tailwinds and favorable demand-supply dynamics. Accordingly, Ontario Teachers’ has invested alongside like-minded local partners in living sector assets across the U.S., UK, and Australia.
The vendor is the ADCO Group, one of Australia’s leading private construction and property groups. The projects were managed on behalf of ADCO by Arklife – a specialised BTR platform which is also co-owned by ADCO.
Hines will provide asset management services and Arklife will continue to be the property manager for Robertson and Cordelia.
About Ontario Teachers’
Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $255.8 billion as at June 30, 2024. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 340,000 working members and pensioners.
Our more than 450 investment professionals operate in key financial centres around the world and bring deep expertise in a broad range of sectors and industries. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.3% since the plan's founding in 1990. At Ontario Teachers', we don't just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit otpp.com and follow us on LinkedIn.
About Hines
Hines is a leading global real estate investment manager. We own and operate $93 billion[1] of assets across property types and on behalf of a diverse group of institutional and private wealth clients. Every day, our 5,000 employees in 31 countries draw on our 67-year history to build the world forward by investing in, developing, and managing some of the world’s best real estate. To learn more, visit www.hines.com and follow @Hines on social media.
About ADCO
ADCO is a leading private Australian construction and property group with an award-winning portfolio of almost 4,000 successfully completed projects. The Group was established in 1972 and operates nationally. ADCO has a team in excess of 650 people delivering annual revenues of around $1.5 billion and remains proudly family owned. Please see our website and LinkedIn for further details.
About Arklife
Arklife is a specialist Build to Rent group, providing Development, Property and Investment Management Services within the Build to Rent Sector. Arklife is a recognised leader in the Australian BTR market and is currently involved in four projects totalling in excess of 1500 apartments.
This is an interesting deal for a few reasons.
First, OTPP's global real estate unit which was internalized following the bifurcation of Cadillac Fairview a little over a year ago hit the road running.
The focus remains squarely on sector and geographical diversification of its massive $30 billion real estate portfolio.
Teachers' is looking to diversify away from Retail and Office in Canada to more global multifamily and logistics assets.
Here, it partnered with a best-in-class real estate asset manager, Hines, to acquire Build-to-Rent (BTR) properties in Brisbane Australia.
Hines is well-known among institutional investors and they are often a partner of choice to acquire real estate assets all over the world:
Hines is a leading global real estate investment manager. We own and operate $93.0 billion¹ of assets across property types and on behalf of a diverse group of institutional and private wealth clients. Every day, our 5,000 employees in 31 countries draw on our 67-year history to build the world forward by investing in, developing, and managing some of the world’s best real estate.
Hines has 176 developments currently underway around the world, and historically, has developed, redeveloped or acquired 1,751 properties, totaling over 595 million square feet. The firm’s current property and asset management portfolio includes 1077 properties, representing over 382 million square feet. With extensive experience in investments across the risk spectrum and all property types, and a foundational commitment to ESG, Hines is one of the largest and most respected real estate organizations in the world.
The fund's commitment to ESG is critically important and that too played a role in this deal as more and more Australian consumers are looking to rent properties with the highest environmental standards.
Jun Ando, Head of Asia-Pacific Real Estate at Ontario Teachers’ Pension Plan summarized the deal well:
“With the Australian population expected to see continued growth and consumer preferences in the country moving more towards the rental sector, we see strong, long-term potential in the Australian multi-family market. These assets provide us with a strategic entry point into Brisbane and, working alongside Hines and Arklife, we will look to offer a compelling value proposition for tenants and create value for our stakeholders through active asset management.”
You might be wondering why Australians' preferences is moving more towards the rental sector.
Well, property prices in Australia are still exorbitant, there's a severe rental housing crisis and roughly one in three Australians rent their homes.
Similar to Canada, Australia has a supply problem when it comes to new homes and they're not keeping up with growing demand.
In short, Australia has become a nation of renters (coming to North America) and international real estate funds like Hines are capitalizing on the growing demand for high end, eco-friendly, Built-to-Rent homes.
Alright, let me wrap it up there.
Below, a webinar form a year ago on the future of the Built-to-Rent market in Australia featuring James Barlow, Niall McSweeney and Anthony Lisbona of the Altus Group.
Also, Brisbane has been a hotspot for the country for quite some time now, but how has the rental climate for this capital city been recently? Samantha Eason, a property manager and founder of Exclusively Managed, joins Todd Sloan of the Pizza and Property podcast to reveal locations of some of the hotspots around the bustling city of Brisbane, for example, in North Brisbane, where 3 to 4 bedroom houses have been flying off the shelves, so to speak.
The diversity has been strong in Brisbane as older couples and first home buyers alike have been looking into the market as of late. Samantha stresses the importance of finding the right tenants rather than closing a deal immediately without prior checks, as this can be a very crucial decision and will be the difference between consistent cash flow or constant headaches from unruly tenants.
Update: On Thursday, OTPP announced White City Place signs landmark tenant Imperial College London, continuing rapid growth as part of leading UK life sciences and technology district:
Stanhope, the leading developer and asset manager, with Ontario Teachers’ Pension Plan are delighted to announce today that Imperial College London, the world-class science, engineering, medicine and business university, has signed an agreement to take 47,650 square foot of space at White City Place.
Imperial will take the first floor of the MediaWorks building at White City Place for a new Professional Services hub, joining tenants including major life sciences companies like Autolus, Novartis, and Engitix, as well as other internationally renowned educational institutions, like the Royal College of Art and the Tokyo College of Sushi and Washoku, in the growing White City Innovation District.
The MediaWorks building offers both CAT A office and fully fitted office accommodation, with fully fitted grow-on laboratory units for growing life science companies. The available accommodation is set around three 29-metre atria that fills the spaces with light, forming a world-class facility offering complete flexibility for both science and business occupiers.
White City Place, alongside Imperial’s own White City Campus on the other side of Wood Lane, is creating a network of innovation spaces for businesses of all sizes in the 1.9 million sq ft campus. It is home to occupiers in the creative sector including household names like the BBC and ITV, as well as the more recent additions of Me+Em and Gravity Media.
White City Place is part of a rapidly growing £4bn portfolio of office and Life Science buildings covering six million sq. ft. asset managed by Stanhope including Television Centre and Cambridge Science Park.
David Camp, CEO, Stanhope, stated:
“We are delighted that Imperial College London, our partner in innovation in White City, has decided to expand into White City Place within our growing life sciences cluster and world class educational institutions at the MediaWorks and WestWorks buildings. The move helps cement White City Place as a key destination for ambitious innovative businesses and start-ups seeking world-class modern facilities, a prime location and very good transport links.”
Jenny Hammarlund, Senior Managing Director and Head of Europe Real Estate at Ontario Teachers’ Pension Plan, said:
“Ontario Teachers’ and Imperial College London share a commitment to education and its essential contribution to society. Imperial’s decision to become a tenant in the MediaWorks building at White City Place means they will join a host of world-leading life sciences companies, like Novartis and Autolus, and helps further enhance White City Place’s status as the number one location of choice for innovative, forward-thinking companies in the life sciences, biotech and education sectors.”
Robert Kerse, Chief Operating Officer at Imperial College London said:
“At Imperial, we recognise that world class professional services need great workplaces. That’s why we’re excited to be locating our White City Professional Services Hub within the MediaWorks building.
“This move places our professional services community at the heart of our White City Campus, an innovation ecosystem where great ideas grow, and a key anchor of the WestTech Corridor which is harnessing the university as a powerful engine for investment.”
This is another great deal for OTPP's real estate team in the niche life sciences sector. Imperial will join other high profile tenants at White City Place like Novartis and Atolus, bolstering its profile as an innovation hub for the life sciences sector.
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