A build to rent development in Mt Albert. Photo: RNZ / Tom Taylor
New research has found build-to-rent apartments are in high demand.
Developments which only offer rentals and never sell off any of their units are growing in both popularity and size here in New Zealand.
Simplicity Living managing director Shane Brealey said he had seen some pretty emotional responses when people are offered a rental spot in the buildings his company developed.
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"There was one lady solo mum, two children, and she burst into tears when she was offered a place in our Point England build-to-rent project that just completed.
She had lived in 20 addresses in the last 20 years, and she now knew that she was safe and she could stay there for the next decade at least."
People who sign a tenancy at Simplicity Living have two options: a yearly rent renewal, or they can instead sign up for a full 10 years.
Brealey said the uptake had been decent.
"Every resident that we have in our properties are offered that 10-year lease term, about a quarter of them are taking that up. The other three quarters are quite happy with the year-to-year lease agreement."
Commercial real estate services and investment firm CBRE associate director of research Tamba Carleton said build-to-rent schemes were relatively new in New Zealand, but her research had found they were very popular.
"There was really high demand for the product that was being offered. Eight out of the nine buildings had zero vacant units, so zero percent vacancy - that meant there was nothing available and quite a few of them had a waitlist."
That stacked up with Brealey. He said the first stage of their first build-to-rent unit, Kupenga in Point England, was let within weeks, and other developments were continuing at a similar pace.
"Our second one is in Oranga, a sub-suburb of Onehunga. We had 48 homes there and they'll be fully let within two weeks. Stage two of Kupenga, back in Point England, that is just commencing letting and we think that will take about two weeks to complete."
To the west of Simplicity Living's developments, Jules Older lived in an apartment built by a different developer in Mt Albert. He was in love with it.
"This building has a mix of humans of age, race, generation, thoughts, male, female, the whole works. It's really great.
"It's extremely well-built. Although our apartment is really tiny by almost any standard, it's so well designed that it doesn't feel at all cramped to us."
Carleton said her research had proved build-to-rent was here to stay, and it was getting bigger.
"Build-to-rent is very new in the country, but it's been proven overseas, and it is growing and evolving and we've seen that with the research.
"So, while we did qualitative interviews with operational build-to-rents, these are the first generation of projects. They're 10 to 50 units of scale generally, we've seen now over 100 unit projects being floated and in planning."
Kiwi Property's build-to-rent scheme near Auckland's Sylvia Park was set to be New Zealand's largest. It was currently under construction and would have 295 units.