Will Build To Rent developments be tomorrow’s retirement village competitor?
Mirvac’s LIV Indigo, the first residential community in NSW designed and built exclusively for renters, has hit 98% capacity.
Compare this to the latest PwC/Property Council Retirement Census survey from the Retirement Living Council, which shows the average occupancy in a village is 90% and the average village home price is just 54% of the median value in the same postcode.
When LIV Indigo at Sydney Olympic Park was 80% full, 10.3% of occupants in the build to rent were aged 50 and beyond - a figure which should equally worry all retirement operators.
What is Mirvac doing that the village operators are not?
A Charter Keck Cramer analysis of advertised rents at Mirvac’s LIV Indigo and rents for nearby private rental apartments shows the median one-bedroom, one-bathroom apartment rent is 19% higher at LIV Indigo, 27% more for a two-bed unit. Rents at LIV Indigo are roughly 30% above the suburb median.
LIV Indigo offers extra services, longer leases, an onsite resident services ambassador, and has its own cinema, shared barbecue areas, commercial kitchens, bicycle share, co-working spaces and garden areas.
In August 2020, Mirvac's BTR general manager Adam Hirst said the 315 apartments at LIV Indigo at Sydney Olympic Park in Sydney’s western suburbs, were on track to be rented out in the next 12 months. The first renters moved in on 1 September 2020.
“The outlook remains positive and we expect limited forecast apartment supply and the recent re-opening of international borders will help drive demand in the sector in the near term, which bodes well for our $1 billion 9 build to rent assets under construction,” said Mirvac’s Head of Integrated Investment Portfolio Campbell Hanan at the company’s 3Q22 operational update.
One of Mirvac’s BTR developments under construction, LIV Munro, Melbourne (490 apartments), is expected to be built by the end of the year. Pre-leasing is expected to commence in August.
In addition, LIV Anura in Brisbane (396 apartments) and LIV Aston, Melbourne (474 apartments) are also underway. LIV Albert Fields, Melbourne (498 apartments) has been given planning approval. Upon completion, Mirvac will have 2,173 apartments across its BTR platform.
