Build to rent (BTR) developments are purpose-built residential developments that are designed specifically for the private rental market, and typically involve a developer:

• Developing the BTR asset.
• Retaining ownership of the BTR building once construction has been completed.
• Leasing the completed dwellings to residential tenants and managing the building (or appointing a professional manager to do this).

While BTR is an relatively new form of development in Australia, it is an established asset class in places like the US and the UK. Despite the initial barriers to investment in BTR in Australia (particularly from a tax and planning perspective), this area is expected to continue to grow over the next few years, particularly with the introduction of appropriate tax and other concessions to incentivise developers and investors. BTR developments also touch on many aspects of law and practice, including property law, corporate structuring, banking and finance, tax, planning and environment and construction.

In response to the continued growth of the Australian BTR sector, Practical Law Commercial Real Estate and Practical Law Banking and Finance have recently published the following new resources:

• Practice note, Build to rent (BTR): overview. This note provides an overview of BTR development in Australia, including the key transacting parties, the legal structure of a BTR project and the benefits and challenges of BTR.
• Practice note, Build to rent (BTR): key investment considerations. This note provides an overview of the key investment considerations for a BTR project, including tax, planning and ongoing management issues.
• Practice note, Build to rent (BTR): funding models. This note gives an overview of the two main funding models for BTR developments in Australia, being a financier-led debt finance model (including key differences with debt financing of traditional “build to sell” developments) and an investor-led fund through model.