Subi shows the way in build-to-rent (7 Dec 2024)
Curtin MP Kate Chaney believes a residential development unique to Subiaco will now be replicated across Australia and help provide much-needed homes after a breakthrough in Canberra.
She welcomed the passage in federal parliament of the Albanese government's housing Bill which includes tax reforms for "Build to Rent" projects.
"The Sentinel project in Subiaco is a great example of what's possible," she told the POST. "When developers are also future landlords, they are incentivised to build a quality product because they are the ones who have to manage it. "It's great to see Subi leading the way for the country.
"I'm glad the Build to Rent housing Bill has finally passed, having been held up for months by the Greens and the Opposition. "Whenever I speak to constituents about the housing crisis, they say politicians need to stop scoring points and get on with solving the problem.
"There's no quick fix for housing, but these tax incentives will attract more investment in long-term rental projects, so renters have better security of tenure and more choice."
Earlier this month Ms Chaney visited an apartment block with 93 units in Price Street, close to Lords Recreation Centre, which opened in 2019 as the first build-to-rent project in Australia (Units built to rent, POST, October 19 2019).
A second apartment block with 80 units, directly across the road and based on the same business model, came on stream in 2022. Both blocks were built and operated by American investment and development group Sentinel, which has billions of dollars invested in similar developments across America.
But the Subiaco projects which have been fully booked and occupied since they were built remain an exception to the rule in Australia. Keith Lucas, Sentinel Australia's managing director, gave the local MP and the POST a tour of the buildings.
At the time Ms Chaney asked him how the build-to-rent Bill might affect his decisions for further projects. He replied: "If you can get a 30% withholding tax rate down to 15%, that will absolutely change the metrics for us to open up, and for foreign investors to consider investing in housing,"
He said funding for the Subiaco project came from European investors and the business model was a great way forward for new development. "Build to rent offers an ability for projects to get out of the ground quickly," Mr Lucas said. "We are not waiting on presales and as the developer and the investor we take all that risk and are in it for the long term."
He said both buildings were fully occupied and Sentinel was happy with its decision to break into the Australian market through Subiaco. But plans to develop two more already-approved apartment blocks in the China Green precinct are still in limbo. "We are working on moving the third phase forward right now, but there are still some pretty significant headwinds, i.e. cost and contractor availability," Mr Lucas said.
He said it was "a different world" when their first two Subiaco projects were delivered on contracts and costs that were locked in before COVID. "You have projects that have increased by 15% in cost and you haven't changed a line on the drawings," he added.
