HESTA and AXA last week announced separate initiatives to invest in social and affordable housing projects in Australia in a move that will help spearhead the development of the sector into an institutional asset class.
HESTA is seeding $240 million into specialist affordable housing fund manager Super Housing Partnership’s first fund. In addition to the HESTA contribution, funding will comprise an additional $100 million from another investor early next year and around $340 million of debt provided by ANZ and other financiers says SHP venture partner Kris Daff.
“The model is to create value aligned capital with other similar investors so that we can invest across projects,” Daff tells Investment Magazine. SHP is also working with AustralianSuper and affordable housing developer Assemble to launch a build-to-rent-to-own fund as well as a co-investment fund also with AusSuper.
HESTA chief executive Debby Blakey said in a media release its cornerstone investment was aimed at generating stable, long-term returns for members while helping drive investment in an emerging asset class.
“We have the opportunity to innovate and invest to meet an unmet need, providing our members with appropriate risk-adjusted investment returns by improving housing supply,” she said.
The first fund will develop in five projects in Victoria located in Preston, Bentley, Coburg, Clayton and Kensington, adding more than 1600 mixed-tenure dwellings to the pipeline.
Separately AXA IM Alts, St George Community Housing and the National Housing Finance Investment Corporation (NHFIC) announced a build-to-rent affordable housing partnership backed by a $300 million umbrella facility from NHFIC. The first project comprises 350 mixed tenure social and affordable dwellings located in Westmead in western Sydney.
“This transaction and the launch of AXA IM Alts Australia’s build to rent strategy allows us to extend our global residential conviction and leverage our track record in the sector to meet the long-term investment requirements of our investors,” said Antoine Mesnage, head of Australia at AXA IM Alts in a media release.
Cbus Super on Monday announced a $500 million commitment over five years to support the construction of social and affordable homes through the Housing Australia Future Fund as part of the National Housing Accord. Chief executive Justin Arter said the new commitment was an extension of its provision of affordable financing for community housing providers through NHFIC.
The Commonwealth government is leading a national effort to work with industry players and institutional investors to plug the widening gap of available affordable housing in Australia, estimated at over 600,000 in the next decade.
“HESTA and SHP… have effectively built the pipes and pumps to allow institutional capital to flow towards addressing our national housing crisis,” Blakey said.
“We’re now looking to work with all levels of government to address blockages that are holding back institutional investment at scale.”
*This article was updated on November 28, 2022 to include Cbus Super’s $500 million commitment to the Housing Australia Future Fund