The Retirement Living Council (RLC) rightly state its products are affordable, but a partnership between one of the world’s leading fund managers, PGIM Real Estate, and the founders of modular hotel chain Tribe, has launched in Australia with a co-housing product that is cheaper and looks attractive.
300 smaller-scale apartments are planned in Macquarie St, Parramatta (pictured), the major Sydney city, and another 300 planned for Wickham St, Fortitude Valley, 1.6km northeast of Brisbane’s CBD, with the portfolio worth a ballpark $300 million, according to the Australian Financial Review.
PGIM and Point Capital aim to develop a further two to three projects with an initial portfolio target of 1,250 to 1,500 units at completion. The projects will use a modular construction method, which will save money by speeding up the building process.
The key to PGIM’s residential-for-rent strategy is its focus on the co-living format, a sub-sector of the Build to Rent asset class. Co-living projects typically include smaller apartments with a greater emphasis on communal spaces such as coworking, libraries, cinemas, and event spaces, similar to upmarket retirement villages.
“Increasingly we see this growing need for rental housing, and especially in cities where the cost of residential buying has become really high. And because of that we see this growing need for residential rental housing in cities like Singapore, Hong Kong, Shanghai, and in Sydney and Melbourne in Australia,” Benett Theseira, managing director and head of Asia-Pacific, at PGIM Real Estate, said.
PGIM is the global asset management business of New York-listed Prudential Financial, which has $2 trillion in funds under management. In Australia, PGIM has about $3 billion in equity and debt mandates, across logistics, office, retail, hotels, data centres and mixed use. It also has some exposure to a variety of housing forms, from build to sell, land lease communities, student housing and seniors living.
Two PGIM-run Asia-Pacific funds are backing the co-living venture. Its partner is Point Capital, a real estate investment platform that specialises in modular construction, created by Tribe founders Mark and Melissa Peters and Lucas Salagaras, a former investment banker.
The SOURCE: Co-housing with amenities similar to those in retirement villages sounds like serious competition.