Bates Smart's Julian Anderson discusses Build-to-Rent

Laurence DragomirNovember 1, 20180 min read

Earlier this month, reported on the Victorian State Government's endorsement of Grocon's 60-storey Build-to-Rent development on City Road in Southbank.  Planning Minister, Richard Wynne endorsed the Bates Smart-designed proposal of 400-apartments, noting that barriers have been removed to pave the way for this new asset class that offers Melburnians a quality yet affordable housing option.

New ideas often take a while to navigate the planning system. These actions will ensure that build-to-rent can prosper and increase the stock of rental housing to meet the current record demand.

- Richard Wynne, Minister for Planning

According to Bates Smart, the design of the Southbank development has "been distilled from the best offerings noted from significant field research locally and abroad including a study tour of the US, conducted in March 2018, where representatives from Bates Smart visited 18 properties across New York, Boston and San Francisco." spoke to Bates Smart Director Julian Anderson about the research has undertaken on the Build-to-Rent model and the office's work in designing Melbourne's first BTR project on Southbank.

Bates Smart's Julian Anderson discusses Build-to-Rent
The site which has now been cleared. Image: Ryan Seychell What are some of the barriers to successfully adopting the Build-to-rent model in Australia?

Julian Anderson: The main barrier in Australia at the moment is the challenging tax environment. Assuming the tax regime is modified, there shouldn’t be any other obstacles to its success. In Europe and the US, millennials are choosing to live in these developments because of the lifestyle it supports and like Australia, home ownership is becoming increasingly difficult because of rising costs and supply constraints.

The Treasurer, Tim Pallas has commented that: “Encouraging BTR will increase the supply of new, large-scale housing for longer-term renting.” There have been barriers for residents in terms of choice in the rental market and build-to-rent offers Australians a genuine alternative for occupants to create and maintain the lifestyle they want and continue live in the CBD with access to the best in transport, work, retail and lifestyle activity.

There are some negative connotations associated with the US build-to-rent model where it is perceived as creating an elitist environment. This did not appear to be the case during our team’s study tour of the US build-to-rent model in 2017 where we visited 18 projects. We experienced first-hand how the US model encourages and promotes a diverse community and caters to varying lifestyle needs, while offering a more secure housing solution.

U: How can the build-to-rent model address the challenges associated with housing affordability and population growth?

JA: Residential development in Melbourne and the CBD periphery is relatively stagnant due to lending controls tightening for both foreign and local developers and purchasers. With Melbourne’s population scheduled to double to 8 million within the next 20 years, making it the size of London today, we will need to cater to this huge population growth. One way to do that is via the introduction of this build-to-rent typology. The success of these projects is not constrained by purchasers’ willingness or ability to buy, rather, it is driven by a demand in Melbourne that is growing exponentially.

Affordability and build-to-rent don’t necessarily go hand-in-hand and we need to continue to look at international models to establish an appropriate affordable housing provision in this country. This is as much an issue for ‘build-to-sell’ apartment developments as it is for ‘build-to-rent.’

How did you approach the design of City Road compared to say one of the luxury projects Bates Smart have designed on Spring Street?

JA: As with all of our projects, we start by developing a brief with the client. This was undertaken on this project during a study tour of the US, during which we surveyed 18 build-to-rent properties across New York, Boston and San Francisco. The newer properties contained significant amounts of amenity space, and most interestingly, the provision of areas within the building enabling flexible working. For example, in several build-to-rent properties in the US we saw residents running their small businesses from their laptop using the work lounge spaces provided within the development, rather than running it from out of their apartment.

So while the brief is different, the design process is very similar. We’ll ask ourselves questions like how does the building need to respond to its local context, how do we maximise access to light and views, how are the amenity spaces arranged and distributed to maximise benefits for the residents and how do people want to live in the 21st century? It’s then up to the client working with us to determine what level of luxury they’re seeking to introduce into the project. It’s about creating the best environment in which people can live and enjoy the lifestyle offerings.

Bates Smart's Julian Anderson discusses Build-to-Rent
The 60-storey BTR project on Southbank. Image: Bates Smart

U: How was the City Road project conceived? What were some of the key drivers behind the design?

JA: Our client recognised the scale and importance of the build-to-rent market in the US as well as its global appeal and saw the opportunity that existed in Melbourne, particularly with the likely demand in the next 20 years. There was also a recognition that the existing rental market in Australia lacked the sort of security of tenure, consistent quality and services that were on offer in the US.

Travelling with the client and constantly talking about design and the project allowed us to very quickly agree on many aspects of the design. We saw how other buildings had dealt with similar challenges we were facing in our local context including how to deal with proximity to our neighbours, a material palette that responds to former industrial neighbourhoods and height. Constantly debating and discussing design over this two-week period sped the design process up so that upon return, we mapped out a very clear design direction for us to pursue.

We were very interested in creating a building that responds to the building’s local context, so the use of the brick in the podium is about relating to the large number of brick warehouses that used to exist in this area. We also see brick as having that tactile quality that creates a physical connection between the residents and the building. This materiality makes the building more inviting.

The facade approach is ordered and calm relative to many of the nearby buildings. We wanted to create a building that in its tower form was different to many neighbouring developments in Southbank. There are so many projects in this area that are trying to stand apart and make a statement, so we focused on creating an elegant and sophisticated building. There is a sense of repose and calm in this project.

U: The City Rd project is 60-storeys tall - is there an ideal size for delivering the build-to-rent model? Or is it easily scaleable?

JA: It’s relatively straight forward to scale up or down in design terms. In the US there is a bit of an amenity arms race occurring. We saw developments of over 1,000 apartments that have up to 8,000 to 10,000sqm of amenity space including full size basketball courts and commercially scaled gyms. In the US and in particular San Francisco, we saw smaller scale developments of under 100 apartments which were as successful as their larger counterparts, so I can see no obstacles to this being introduced at a smaller scale in Australia.

One of the key components of these types of developments is the ability to build a community in a way that is quite different to what occurs in a build-to-sell development. Strong communities were created, with very engaged residents, particularly in the smaller scale developments when compared with those that we saw that contained over 1,000 apartments.

U: Do you expect to see a development that comprises a mix of BTR and apartments for private sale in the future? 695 LaTrobe for example would feature a mix of BTR and hotel suties.

JA: Yes I think if you look to other world cities of Melbourne’s size, and appreciating our future population growth in the next 20 years, you’re seeing more and more mixed use-type developments located within proximity to public transport. We need to continue to cater to increased population densities in and around these transport nodes. For the ongoing success of Melbourne and the continued creation of walkable cities, we need to provide this rich mix of spaces where people can work, live and play.

There is also an opportunity as the build-to-rent market matures in Australia to create more blended living and working environments. As people’s ability work to more flexibly and remotely increases, our buildings need to be designed to suit the changing working environment. This hasn’t happened yet so it’s a good opportunity for architects and developers to explore more creative and interesting design solutions. I’d like to think that build-to-rent could be the catalyst that allows further exploration of these more blended mixed-use environments.

Laurence Dragomir

Laurence Dragomir is one of the co-founders of Urban Melbourne. Laurence has developed a wealth of knowledge and experience working in both the private and public sector specialising in architecture, urban design and planning. He also has a keen interest in the built environment, cities and Star Wars.
Bates Smart
Build to Rent
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