M&G Real Estate Commits $450M to Australian Multi-Family Specialist Novus
M&G Real Estate commits A$450 million to Australian multi-family specialist Novus; continues residential push as it enters Australia’s multi-family market
M&G Real Estate – part of M&G plc’s £72billion (US$94.4 billion) private assets and alternatives division- is making its first foray into Australia’s multi-family market (also known as Build-to-Rent) via a develop-to-core partnership with Novus – a developer, owner and operator of multi-family assets. On behalf of its Asia Property Fund, M&G will commit A$450 million to develop a portfolio of multi-family properties in some of Australia’s key cities with a focus on Melbourne and Sydney*.
M&G’s investment will provide capital for the Novus Build-to-Rent Trust (NBT) seeded with the 173-home residential scheme located in Melbourne’s Arts Precinct, Novus on Sturt. The project is targeting a 7-star NatHERS rating, will be an all-electric building, powered by renewable generated green power and will exceed National Construction Code (NCC) energy efficiency requirements. Environmental features will include solar PV panels, energy efficient appliances, rainwater capture and on site-reuse and integrated smart monitoring systems**. Construction is due to start later this month.
Beyond the seed asset, NBT will focus on developing a portfolio of multi-family assets focused on Australian capital cities with an initial focus on Sydney and Melbourne. Australia’s multi-family sector is poised to mature over the medium to long term due to lifestyle changes, rising home prices and demand for high quality, purpose-built homes with service-focused property managers. The country’s strong population growth over the past 15 years is set to continue which, in addition to a structural undersupply of apartments, strong rental demand and affordability constraints presents a compelling opportunity for long term investors.
Commenting on the partnership, Adam Hirst, CEO & Managing Director of Novus, says: “As a local specialist, we have a clear vision and value proposition for multi-family in Australia and are proud to partner with M&G Real Estate – an experienced global investor in the sector.”
David Southon, Executive Chairman, Novus and Aliro Group, added: “Having undertaken an extensive process, we are pleased to have finalised an agreement with M&G Real Estate, a highly regarded global investor, to create and manage a high quality, Australian multi-family portfolio. Together, we are well positioned to execute on our compelling pipeline of opportunities, adding to an excellent seed asset already in place.”
This latest commitment from the M&G Asia Property Fund swiftly follows its recentUS$424 million acquisition of a 30-asset residential multi-family portfolio in Japan. The Fund’s continued conviction in multi-family now takes its total commitment to multi-family in the region to US$1.28 billion.
Richard van den Berg, manager of the M&G Asia Property Fund, concludes: “Having been active in the multi-family market in Japan for many years, we are very pleased to be working with a partner of Novus’ calibre in Australia, where we already have significant exposure to other sectors. We look forward to building our capability and providing our investors with access to the resilient income stream that Australia’s residential real estate market offers.”
*Represents a 95%stake in the partnership.
**NatHERS ratingis on average across project, all residential uses electric
Novus (www.novusaus.com) is a developer, owner and operator of build-to-rent (BTR) assets focused on the Australian market. Through our vertically integrated platform we manage every aspect of the asset creation process and ongoing operations – a platform designed to ensure the communities we create and manage provide exceptional outcomes for both our residents and investors. Combining our entrepreneurial approach with our senior management’s institutional background, we are able to provide access to unique investment opportunities, delivering attractive risk adjusted returns.
Aliro Group (www.aliro.com.au) is a property development, investment and funds management group that works with a diverse range of institutional and wholesale capital partners to establish, grow and actively manage sector specific property funds — delivering enduring value for its investment partners. Specialising in the creation of income producing, investment grade real estate, Aliro currently has a pathway to $4B of AUM across the Eastern States of Australia. Founded by David Southon and Daniel Wise, Aliro enjoys deep industry relationships and embodies entrepreneurial vision, sound judgement, deep market knowledge, high integrity and agility.
M&G Investments is part of M&G plc, a savings and investment business which was formed in 2017 through the merger of Prudential plc’s UK and Europe savings and insurance operation and M&G, its wholly owned international investment manager. M&G plc listed as an independent company on the London Stock Exchange in October 2019 and has £370 billion of assets under management (as at 31 December 2021). M&G plc has customers in the UK, Europe, the Americas and Asia, including individual savers and investors, life insurance policy holders and pension scheme members.
For nearly nine decades M&G Investments has been helping its customers to prosper by putting investments to work, which in turn creates jobs, homes and vital infrastructure in the real economy. Its investment solutions span equities, fixed income, multi asset, cash, private debt, infrastructure and real estate.
M&G recognises the importance of responsible investing and is a signatory to the United Nations Principles for Responsible Investment (UNPRI) and is a member of the Climate Bonds Initiative Partners Programme.
M&G plc has committed to achieve net zero carbon emissions on its total book of assets under management and administration by 2050 and committed to reduce operational carbon emissions as a corporate entity to net zero by 2030. For more information, please visit: https://global.mandg.com/.
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