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As seen in the Source link, written by realestatesource.com.au on 2020-01-17 03:07:01

A 1.25 hectare development site within Merrylands’ Town Centre
has sold between Sydney developers.

Family owned developer Coronation Property is paying
ASX-listed giant Stockland $41 million for 52-54 McFarlane Street.

The parcel is next door to a Stockland owned shopping
centre and a block from Merrylands train station.

Stockland had previously won permission to replace the holding with five towers comprising 562 flats and a 4500 square metre retail component (artist impression, top).

Coronation intends to build five towers – but comprising
more than 5000 apartments.

About two thirds of these flats, contained in three buildings,
will contain build-to-rent stock, it said.

It has set a seven year timeline.

The site (shaded) is earmarked to make way for 5000 dwellings over the next seven years.

The Merrylands site: 52-54 McFarlane Street

Coronation managing director Joseph Nahas said that
following recent Merrylands Town Centre planning control amendments, he seeks
to explore increasing the yield on the site more than Stockland.

“Our goal is to deliver a mixed use precinct with a
combination of build-to-rent and build-to-sell apartments, as well as a
bustling new retail offering for the community that will include a gym,
supermarket and a wide variety of food and beverage vendors,” Mr Nahas added.

“In our experience, a true mixed use development enhances
the attractiveness of the site – not only for the residents, but the greater
community – and our plans for a well curated ground level retail offering will
provide residents with a superior lifestyle offering.

“We will be incorporating a food hub-dining concept similar
to the one seen at our successful development in Liverpool, The Paper Mill,
where The Paper Mill Food is driving strong demand for our apartments and
likewise, the restaurants benefit from a constant customer base from the
residents”.

Coronation director Les Landerer added “this asset, and
in particular the retail precinct, will rejuvenate the Merrylands Town Centre through
improved public amenity and lifestyle offerings that focus on convenience,
flexibility, utility and community.”

“For Coronation Property, this acquisition also represents the next stage in our ongoing commitment to and belief in Greater Western Sydney, as evidenced by our existing projects in Liverpool, Parramatta and Harris Park.”

Merrylands is about 25 kilometres from the Sydney CBD, just south of Parramatta.

Build to rent in Australia

A relatively new concept in Australia – build-to-rent
involves a developer retaining the residential assets as investments upon
completion.

Longer term, these apartment portfolios are expected to
trade amongst investors.

Several property giants, including ASX-listed ones, embraced
the concept last via the acquisition of major development sites.

Federal ALP proposed taxation reform around build-to-rent
as part of housing affordability initiatives it took to the 2018 election.

Mr Nahas said Coronation Property is backing the concept
to succeed in Australia.

“We very much view the Merrylands site as a seed
investment for our build-to-rent business – whilst this property sector is
relatively new to Australia, it is gaining traction and we see the robust
potential,” he added.

“Our goal will be to deliver 5,000 apartments over the next seven years, and we believe that with our fully-integrated development and construction business, as well as our proven expertise in delivering multi-family residential properties across Sydney, Coronation Property will play a leading role in the establishment of the build-to-rent sector in Australia.”

Mr Landerer said that in recent years, there has been a “prolific
shift” in Australian housing dynamics “which will ultimately spur the success
of build-to-rent”.

“With buyers moving away from the ambition of housing ownership and increasingly into private housing rental, there is an environment where build-to-rent makes more and more sense for property developers,” he added.

“This trend towards rental living has largely been
evident in the younger generations and is driven by a lack of housing
affordability, tighter credit conditions, and changing lifestyle preferences,
with millennials seeking mobility, flexibility and convenience.

“We believe that the confluence of economic conditions,
the current supply and demand dynamics of the Australian residential market, as
well as the change in generational housing and lifestyle preferences, the
conditions are ripe for the establishment of an Australian residential
build-to-rent sector”.

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