Influx of build-to-rent legal work will only increase
It is “extraordinary” to think that build-to-rent (BTR) did not exist in Australia as recently as five years ago, says one Allens partner. Now, it is likely to be a “key pillar” of Australia’s housing supply — meaning more legal work in this space.
In conversation with Lawyers Weekly, Allens partner Tim Chislett (pictured) said that the firm has seen “very large inflows” of capital into BTR in the past 12 to 18 months and that the global player has been involved with several BTR fund establishments.
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“I expect this will accelerate, given recent tax reforms [that] give foreign investors access to concessional withholding tax rates for eligible BTR developments,” he posited.
“Politicians are also alive to the very real impact of the housing crisis on voters, so there’s plenty of political momentum now pushing BTR forward.”
Recently, Allens has advised on what it said was “Australia’s largest-ever” BTR transaction, with Mirvac establishing a $1.8 billion BTR fund, which included an investment from the federal government’s Clean Energy Finance Corporation.
That transaction, Mr Chislett said, “establishes the first BTR fund in this country with both operational assets and a pipeline of development assets”.
Moreover, the global firm advised Malaysian property developer UEM Sunrise Berhad on the sale and development of a site in Collingwood, Melbourne, for the area’s first BTR development, valued at $277 million.
“We continue to see BTR come into its own as an asset class off the back of tax reforms and as an important lever in Australia’s housing affordability crisis,” Mr Chislett said.
He was the lead partner on both transactions.
Given the complexity of these types of deals, Mr Chislett went on, BTR work requires law firms with expertise across all practice areas and firms that are good at collaborating across practices.
“We’ve worked on the most significant projects and fund establishments to date in the sector, which has relied not only on our property team but also on funds, corporate, tax, construction, finance and others,” he proclaimed.
For lawyers, Mr Chislett mused, BTR is an “exciting area in which to work”.
“We often find ourselves faced with completely new challenges as we work with our clients to navigate regulation that doesn’t neatly fit what is effectively a new sector,” he said.
“Given the extraordinary levels of activity and capital now flowing, it’s astonishing to think BTR didn’t even exist in Australia five years ago.”
“I look forward to seeing it go from strength to strength as a key pillar of Australia’s housing supply,” Mr Chislett concluded.