Colliers, on behalf of Ockham, has sold a substantial property in Auckland, which marks the first sale of a new building to a specialist Build-to-Rent (BTR) investor in New Zealand.
Resident Properties Limited paid $23.5 million for the building at 6 Nixon Street, Grey Lynn.
The property consists of 32 apartments and one commercial space and is due for completion in late March.
The building was sold vacant, and the purchaser will be seeking tenants prior to completion.
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Alan McMahon, National Director of Strategic Advisory at Colliers, led the sales process alongside Auckland investment sales specialists Gareth Fraser and Jonathan Lynch.
McMahon says this transaction is a major step forward for the BTR market.
“This is the first sale of a BTR investment, but it won’t be the last. We know of significant investor demand across all price ranges and expect to see more sales like this one in 2022,” McMahon says.
“As well as providing a new investment asset class, BTR has the potential to provide thousands of new, quality dwellings in buildings wholly owned by professional, well-capitalised owners, who will typically provide a much better renting experience than tenants have been used to.”
The BTR sector is well-established in Europe, North America, and parts of Asia, and is growing fast in Australia.
McMahon says one of the difficulties facing BTR developers is finance, partly because there are no pre-sales, but this can be overcome by pre-selling the development to an investor who funds construction and settles on completion, with the building either vacant or leased.
“While there are no pre-sales, we’d suggest the risk is low compared to dwellings built to sell, as the rental market is huge.
“There are around 600,000 people renting in Auckland, and as long as the development is well-located, designed and operated, and rents are set to market rates, there will be plenty of tenant demand.”
- Article supplied by Colliers
