US-based Sentinel, which built Australia’s first Build to Rent (BTR), Element 27 (pictured) at Subiaco in inner Perth, has announced a new partnership with Dutch pension fund manager PGGM to develop and manage up to $1.5 billion in BTR communities throughout the nation.

PGGM's first investment tranche opens up a pipeline of over $700 million in initial development potential for the venture. The partnership aims to develop a national portfolio of approximately 2,500 BTR units, which should have all retirement operators worried.

The Community Apartment Project (CAPs) model is similar to retirement villages but without the Deferred Management Fee (DMF) and it is quickly becoming a challenge to village retirement operators.

Two sites for development in the new partnership have already been confirmed.

"We are excited to expand our relationship with Sentinel into the Australian Build to Rent market. Although the sector is still relatively small, we believe that it will grow over time and become an important part of the Australian housing market,” Jikke de Wit, Senior Director Private Real Estate of PGGM said.

In addition, Sentinel has begun building its first BTR in West Melbourne, and claims to have more than 1,300 BTR units under various stages of development throughout Australia.