Multi-family housing gains traction

06 James Brennan EY presenter

EY’s James Brennan

Build-to-rent or ‘multi-family housing’ is a relatively new concept in Australia and so it was the topic for Churches Housing’s networking breakfast on Friday 16 February with Ernst & Young’s James Brennan.

Brenna, who is EY’s director, Real Estate Advisory Services, said that the definition of multi-family housing is ‘purpose-built rental accommodation which is institutionally owned and operated, principally to secure a defensive income stream’.

‘Build-to-rent is largely a revenue-driven business, managing expenses closely via a comprehensive asset management platform. Revenue growth through dynamic pricing strategy is critical to long-term success.’

He outlined two scenarios for churches considering this idea – ground lease or sale – and analysed both from two viewpoints: the landowner (church) and the investor/manager.

06 Fr Shenouda Mansour at Networking Breakfast

Fr Shenouda Mansour, Ecumenical Council

OPTION 1 Ground lease

Landowner/church: grants a long-term ground lease, providing annuity income or units allocated for affordable housing; the landowner retains ownership of the land and improvements at the end of the lease period

Investor/manager: there is no upfront land cost, thus reducing Total Development Cost; target Internal Rate of Return (IRR) is 8-12%


Landowner/church: caveat on the title requires ‘x’ number of units to be affordable housing; the land is ‘foregone’ but the affordable units stay in perpetuity

Developer/manager: long-term annuity market income; required to manage affordable units; target Internal Rate of Return (IRR) is 8-10%

For information, contact James Brennan, 0409 190 326,