Altis Property Partners and Aware Super have bought a commercial building in Preston, Melbourne for $14.04 million with plans to develop it into a build-to-rent (BTR) tower. 

The 3,029 sqm site, located at 6-34 High Street, was sold by owner-occupier PaintMobile, which used the property as a retail outlet and warehouse. 

The site has planning approval for a mixed-use 18-level project comprising 174 apartments, 1,626 sqm of retail net lettable area and 198 basement carparks, offering 25,061 sqm of total gross floor area. 

Alek Misev, Aware Super’s Senior Portfolio Manager – Property, said it was an ideal site for the fund’s next affordable housing development for essential workers in Melbourne.  

“We’ve been investing in essential-worker affordable housing for several years now and we already have almost 1000 apartments completed or in various stages of planning and development across Sydney, Melbourne, Perth and Canberra,” Misev said. 

“We have many essential workers among our members, and we know how difficult it can be for them to find secure, quality housing that’s both affordable and close to their workplaces. 

“We also know how highly they value such housing. We’re delighted that we’ll be adding Preston to the list of locations where we’re helping to address this demand and support essential workers.” 

Lukas Byrns and Marcus Neill of Cushman & Wakefield Metropolitan Markets negotiated the sale. 

Byrns said a mix of build-to-sell and BTR developers had vied for the site. 

“This is our third recent sale to BTR developers across suburbs Brunswick, Docklands and now Preston, with over 1,000 new units in the pipeline,” he said. 

“The fundamentals of the apartment market are strong and supercharging the BTR sector due to an undersupply of new apartments being constructed, sustained long-term population growth and affordability challenges caused by increasing house prices. 

“We are dealing with a wide range of groups, often backed by global institutions, all with a strong desire to place capital into BTR projects.” 

The deal comes after Oxford Properties and Indi acquired a new Build-to-Rent (BTR) development in Melbourne’s Southbank last December, while Gurner and Qualitas unveiled a new BTR project in St Kilda.  

Last November, Macquarie Asset Management announced that it was funding Local’s first BTR asset, a 500-apartment project at Kensington in Melbourne’s inner north-west.