Cbus is sponsoring the National Housing Conference 2015 (NHC) to help progress the creation of a mechanism or product that would enable it to invest in affordable housing.
The super fund is one of a number of sponsors of the biennial event, which is the largest cross-sector housing meeting in Australasia, due to be held in Perth at the end of October.
David Atkin, chief executive of Cbus, said ensuring people have access to affordable housing is a critical part of the retirement jig-saw puzzle, and that superannuation can play a role in helping to improve the supply of affordable housing.
He cautioned against this happening at the individual level, as the purpose of superannuation was not to help someone finance a property during accumulation, but to help people fund their retirement.
“However, as an investor we believe Cbus can, and should, play a role in helping to deliver positive housing outcomes for our members and for the wider community. Cbus members work on construction sites to build houses with their hands – we believe their superannuation can also help to build houses,” Atkin said.
For the fund there are a number of necessary characteristics to make institutional investment feasible in residential housing.
Firstly, there would need to be appropriate scale for the investment. While it has not set an exact size or benchmark the fund would be looking for opportunities in excess of $50 million.
Secondly, there would need to be an appropriate rate of return.
“There is no magic number but Cbus is a patient investor and attracted to investments that can provide direct and indirect benefits to members. If there was a product or vehicle with reasonable or guaranteed returns and long term horizons then Cbus would be open to negotiation regarding the expected rate of return,” Atkin said.
Thirdly, Cbus would prefer investments that created new housing stock.
“Housing affordability cannot be addressed without tackling issues around supply and as the population of Australia increases we need to build more houses and more infrastructure,” Atkin said.
Brett Chatfield, investment manager, public markets at Cbus, is part of a panel session at NHC, entitled Moving from talk to action: institutional investment in affordable housing. The session will examine the range of ways in which new sources of finance are being drawn into the provision of affordable housing.
The panel will also feature: Wendy Hayhurt, chief executive officer of NSW Federation of Housing Associations; Professor Graeme Newell, professor of property investment at the University of Western Sydney; and Jon Ross, executive director, global head, public sector and asset management at Westpac Institutional Bank.