The Macquarie Group Ltd (ASX: MQG) share price had a strong start on Thursday, opening 0.41% higher at $167.49 and rising to $168.50 before pulling back to $166.96 at the time of writing.
Macquarie shares are on the move after news the company is looking to expand its presence in the build-to-rent property market.
Let's investigate further.
What is Macquarie up to?
Let's start this off by first defining the build-to-rent industry. For reference, it's just as it sounds – when developers build or buy a property with the intention of renting it out as opposed to selling it. It isn't a new concept, but it has been making headlines lately as more and more firms become invested in this space.
Macquarie's entry into this property niche in Australia would build on its UK business that was established for the same reason, known as Goodstone Living.
Goodstone focuses on the development of "rental communities in urban locations, benefiting from a growing demand for rental housing and an undersupply of high-quality accommodation". It sits under the wing of Macquarie Asset Management in the region.
In addition, there is a wave of interest in the build-to-rent market in Australia, with several participants now clearly visible in the space.
For instance, the Sydney-based firm ARBT Funds Management is set to list on the ASX to give investors exposure to this niche substrata of the property market. Not to mention the intentions of property giants Stockland Corporation (ASX: SGP), Mirvac Group (ASX: MGR) and Lendlease Group (ASX: LLC) to enter the space as well.
So, naturally one might see why Macquarie is seeking to profit from this recent market activity back on Australian shores as well. And from what it seems, it already has a new development in its sights.
A report in yesterday's The Australian revealed the group is targeting a site at 346–350 Macaulay Road in Kensington, Sydney. The property is expected to sell for "close to $50 million", according to the article.
Macquarie bank share price snapshot
The Macquarie bank share price has posted a year-to-date return of about 19%. It is up 30% on this time last year.
Over the past month alone, Macquarie shares have climbed 5.7% into the green.
These results have outpaced the S&P/ASX 200 index (ASX: XJO), which is up about 22% over the past year.
