- In particular, the fund was secured thanks to a global institutional placement of capital totalling $400 million.
- Gurner now has five unique business units across multiple divisions
- Tim Gurner notes many developers may struggle given rising construction and holding costs
Ambitious developer Gurner has today announced the securement of the $1.75 billion fund for its Build-to-Sell (BTS) business.
In particular, the fund was secured thanks to a global institutional placement of capital totalling $400 million.
The news comes as Gurner now has five unique business units across multiple divisions including both Build-to-Sell and Build-to-Rent property development, hospitality, wellness and operations.
The capital raise marks a step forward for CEO Tim Gurner’s 10-year strategy to transform the private developer into an institutional-grade developer, lifestyle brand and fund manager.
Ideal given problems within the construction sector
Due to a large requirement for capital, there is a significant gap between listed and private residential developers, with Gurner filling the void by picking up a large number of large mixed-use sites off-market.
“This capital raise represents a huge milestone for our business as we continue to drive towards our goal of transforming Gurner Group into a fully diversified capital light developer, fund manager and lifestyle brand,” said Mr Gurner.
“This gives us huge dry powder now in the Build to Sell sector to focus on opportunities that arise out of the market dislocation that will occur in the next 12 months, specifically in Sydney as we grow our brand there while also supporting our Melbourne and Queensland endeavours.
“We believe the timing is ideal as the cost of capital and interest rates continue to rise, alongside substantial cost hikes in the construction sector, which we expect will create a lot of opportunities for us.”
Mr Gurner said he believes the next six to 18 months will be critical, given many developers may struggle to hold onto sites due to rising holding and constructions costs. He believes this will create serious opportunities for those who have capital.
“With a lot of dry powder we will continue to actively but carefully pursue new sites across the eastern seaboard of Australia; we are considering a vast range of opportunities that fall anywhere within the $30 million – $200million land bracket,” Mr Gurner said.
The funding announcement comes off the developers $1.2 billion Build-To-Rent fund, which was secured in 2021 via a partnership with alternative real estate investment manager Qualitas.
This platform has already secured four seed sites totalling over 1,350 apartments and begun construction on two major projects in Melbourne, with two others to commence early next year.
