KUALA LUMPUR (June 16): UEM Sunrise Bhd (KL:UEMS) said it has secured an investment partner for its  A$315.4 million (RM906.72 million) build-to-rent (BTR) development in Melbourne, Australia.

In a Bursa Malaysia filing on Tuesday, the property developer said its indirect wholly-owned subsidiary UEM Sunrise (Collingwood) Pty Ltd, acting as trustee for the UEM Sunrise (Collingwood) Unit Trust, has entered into a contract to sell the project land to ITG Australia TS Sub Pty Ltd, trustee for the New Dawn Property A Trust, for A$47.3 million.

Concurrently, another indirect wholly-owned subsidiary UEM Sunrise (Collingwood Development) Pty Ltd has signed a fund-through agreement with the purchaser to undertake development and construction of the project for A$268.1 million, excluding goods and services tax.

UEM Sunrise said the purchaser is wholly-owned by Kio Investment Management Pty Ltd, an Australian living-sector investment manager jointly-owned by US private equity firm Warburg Pincus and Australian property industry specialist Sam Bisla.

The project, located in Collingwood, marks UEM Sunrise's first foray into Australia's BTR segment. Under the arrangement, Kio will own and operate the completed development, while UEM Sunrise will remain responsible for delivering the project.

“The Collingwood project is a key part of our growth strategy in Australia and reflects our continued commitment to expanding our international development portfolio,” said UEM Sunrise managing director and CEO Shaharul Farez Hassan in a press statement.

UEM Sunrise said Melbourne's low residential vacancy rates and ongoing housing supply constraints continue to underpin demand for rental accommodation, particularly in inner-city locations such as Collingwood.

The plot of land is located on a 5,390 sq m freehold site, about three kilometres from Melbourne's central business district.

UEM Sunrise said the development received planning approval in December 2024. Construction is expected to commence towards the end of 2026, with completion targeted in 2030.

The project will comprise 407 rental apartments across two towers, offering studio, one-, two- and three-bedroom units. Planned amenities include a swimming pool, gymnasium, cinema room, co-working facilities, concierge services, bicycle parking and electric vehicle charging stations. The development will also feature retail and food-and-beverage offerings alongside a public town square.

UEM Sunrise said the fund-through structure enables the group to monetise the land while continuing to participate in the project's development earnings. The company said the arrangement would support capital recycling and improve financial flexibility for future growth initiatives.

It said the transaction is not expected to have a material impact on its net assets or gearing for the financial year ending Dec 31, 2026, as the project is expected to be funded through progressive payments and reimbursements from the purchaser.

At market close on Tuesday, shares of UEM Sunrise closed up one sen or 1.7% to 59.5 sen, giving it a market capitalisation of RM3.01 billion. Year to date, the stock is up 8.18%.

Source by: The Edge