Victoria has granted approval for the construction of Australia's biggest build-to-rent project soon to rise in Melbourne’s South Yarra.

The project, which was spearheaded by Greystar Real Estate and architecture firm Fender Katsalidis, will see the development of 625 units and 2,400 square metres of retail and commercial office spaces.

The layout of the project will include two towers over a combined basement.

The 30-storey Yara Street tower will include 382 build-to-rent apartments while the 21-storey Claremont Street tower will house 243 fully furnished, flexible living apartments.

Emerging build-to-rent trend

Greystar managing director for Australia Chris Key said the project aims to contribute to the efforts of diversifying housing choices in Australia and boost the emerging build-to-rent market.

"This purposeful design will not only deliver a best-in-class build-to-rent experience to consumers with expertly managed apartments, workspaces and abundant amenity areas, but it will also introduce an innovative new flexible living typology to Australian renters," Mr Key said.

Mr Key believes the project's build-to-rent model will not only be able to have positive social and environmental impacts on the housing industry but also benefit the economy by creating jobs.

During the construction of the project, 970 jobs are expected to be created.

Around 150 jobs are also expected to be added through the project's office, retail, and on-site management post-completion.

"While build-to-rent is an emerging housing product in Australia, we believe it is simply a matter of time before this residential sector gains a foothold as a primary investment allocation for institutional investors in the Australian market," Mr Key said.

"The City of Stonnington has worked closely with us to understand the nuances of the build-to-rent model, and as a result, we have collectively delivered our shared vision of a truly innovative development plan."

Promoting modern living

Fender Katsalidis director James Pearce said the project promotes modern living among its future residents.

Mr Pearce said the podium design focuses on enhancing the "pedestrian journey" for the community while the two towers provide residents a view of the surrounding landscape.

The project will also provide residents with a convenient way to access the South Yarra train station with a new pedestrian laneway.

Furthermore, the two towers will have retail offerings on their ground levels.

Mr Pearce said this will contribute to the precinct and neighbourhood amenity.

"Our design centres on integrating build-to-rent and flex housing into the character of South Yarra’s Forrest Hill precinct through the incorporation of amenity and a focus on the site’s context," Mr Pearce said.

"The towers will be distinct but achieve cohesion using colours and materiality, with the architecture providing the foundations to allow Greystar to operate numerous services and provide a high-quality living experience for its residents."

The approval will give rise to the construction of around 625 housing units in inner Melbourne’s South Yarra.