Vellum is pleased to share coverage of its Places Build-to-Rent Fund from Financial Standard Sustainability


Vellum Funds Management has broken ground on a $78 million property development in Sydney that will feature a mix of commercial space and residential apartments including 10 NDIS units and a carers unit.

Vellum has partnered with Urban Property Group (UPG) on the $1 billion Places Build-to-Rent (Places BTR) fund. The current development, called Navali, will comprise 163 residential apartments and a 956sqm commercial area. The construction is expected to be completed by the fourth quarter of 2021. UPG will provide a one-year rental income guarantee to investors and a gross rental yield of 5% is projected.

The integration of NDIS units is part of Vellum’s environmental, social and corporate governance (ESG) focus, said Binuo Erth, Vellum’s managing partner. The fund also focuses on the fast-growing BTR segment of the housing market.

“Build to rent is a mature asset class in the US, UK and Singapore,” Erth noted. “It hasn’t just returned great investment, but it’s helped with affordable living. It is our passion in the sector. When we look at the residential market in Australia, it has a long history, we can look back for example, in the greater Sydney region, in the past 20 years, there has been only three small dips when it comes to property value.”

Vellum’s first Penrith project Highland, which was completed in 2019 and is already fully tenanted, Erth said. Highland features 117 residential units, including 10 NDIS units.

Urban is Vellum’s joint partner on the Places BTR fund.

“Urban and Vellum are joint managers on the program,” Erth noted. “Urban does the important matters in-house regarding property management, construction, architecture, while Vellum brings in the investor side.”

The Places BTR fund is geared towards wholesale clients, with a minimum investment of $500,000.

Navali builds on Highland’s success, Erth said.

“We identified early that the Australian market needed solutions like our BTR Highland and Navali projects,” she said. “Addressing market needs while taking socially responsible action and delivering strong investment returns is how projects like these will continue to ensure success of Places BTR.”

Vellum is a financial corporation focusing on direct real estate investment, capital management and corporate financing, which includes operations in Australia, mainland China and Hong Kong.

BTR is a growing sector in Australia. As reported in sister publication Financial Standard, Build-to-rent developer Assemble announced a newly formed board with former HESTA chair Angela Emslie appointed as independent chair.

Emslie will take on the role with the new-look board also comprising of five other Australian business leaders with experience across property, super, responsible investment, banking, finance, aged care and not-for-profits.

A new investor in the company, AustralianSuper also have two board seats, filled by head of property Bevan Towning and investment director Malcolm Skene.

News source BY | THURSDAY, 10 DEC 2020 2:46PM