Build-to-Rent shows a way forward – Du Val Group
“Due to their all-inclusive design and high-quality management, Build-to-Rent projects create efficiencies in terms of maintenance and occupancy, unmatched in similar asset classes,”
With over 20,000 New Zealanders currently on the waiting list for government housing and 6,600 people in transitional housing, the CEO of Du Val Group, Kenyon Clarke, believes Build-to-Rent could provide part of the solution.
The Du Val Group has established a Build-to-Rent Fund, representing an opportunity for qualifying wholesale and eligible investors to co-invest in large-scale residential communities in high growth, in-demand locations.
Managing director of Du Val’s Build-to-Rent division John Dalzell says Build-to-Rent is the asset class of choice for many institutional investors in large cities around the world and for good reason.
“Due to their all-inclusive design and high-quality management, Build-to-Rent projects create efficiencies in terms of maintenance and occupancy, unmatched in similar asset classes,” he explains.
“It’s also important that private equity real estate fund managers champion ethical investment and build to rent represents long term security for renters and investors alike. Unlike investing in commercial property, where an investor’s rental income is reliant on the financial performance of one or two commercial tenants, Build-to-Rent provides the investor with the security of multiple residential tenants.”
Du Val’s has recently announced that it has secured funding from a major banking partner for its first Build-to-Rent Fund and the fund is due to close shortly on its first acquisition comprising two properties providing social and affordable housing for 171 tenants in South Auckland.
Returns are comprised of income as a socially conscious professional landlord and potential growth of the asset value while providing long term surety of tenure for renters.
Over time Kenyon says that it is the intention that the Build-to-Rent Fund will invest in additional large-scale residential projects.
“Proposed projects will generally consist of several buildings, each with multiple units. Projects will come ‘turn key’ and generally feature amenities such as communal kitchen and laundry facilities, Wi-Fi and utilities, furniture packages etc,” he says.
Kenyon explains that location is key to success and projects should be situated near key infrastructure, employment hubs and transport links and backed by strong tenant demand supported by high-quality property and facility management. “It is clear that the people who have lost out during the housing boom have been renters rather than first home buyers and Build-to-Rent provides an opportunity for the private sector, government and community housing providers to come together to provide long term solutions to New Zealand’s housing crisis at the affordable end of the market,” says Kenyon.
“While there has been a focus on providing housing for first home buyers there is a substantial undersupply of housing at the affordable end of the market. We will face significant challenges as a society if we are unable to deliver housing at scale to provide accommodation on every rung of the property ladder.”
Kenyon and his wife Charlotte are the co-founders of the GDV $750m property organisation the Du Val Group. It is one of New Zealand’s largest full-service residential property groups spanning, acquisition and development through to construction, marketing, sales, funds management and post-completion management. In June 2020 Du Val Group was named as New Zealand’s largest private apartment developer by CBRE. The Du Val Group also includes the Du Val Foundation, established by the Clarke family to support children in South Auckland.
Passionate about giving back and practically supporting the communities where its developments are built, the Du Val Group has based its offices and many of its projects in South Auckland. It is incredibly proud to be investing in the growth of this vibrant and fast-growing community, says Kenyon.
Part of its commitment to being part of the South Auckland community has seen Du Val Group partner with local schools via the Du Val Foundation.
The mission of the foundation is to support the economic growth of South Auckland by inspiring and enabling young people through academic support, financial literacy and the normalising of success stories in the community.
“The aim of the Du Val foundation is to nurture a generation of young people who are able to thrive,” says Charlotte. “We are currently working on a number of different programs to support our cause, which we are excited to roll out.”
© Waterford Press Ltd 2021