Backed by two of the nation’s biggest super funds, AustralianSuper and HESTA, real estate managers Assemble and Super Housing Partnerships have merged to “further unlock” the capital flow across mid-market housing.  

The new entity, retaining the Assemble name, will be majority-owned by both super funds and is aiming to bring more institutional investors on board.  

It came after AustralianSuper and the pre-merged Assemble completed the first of its ‘built-to-rent-to-own’ developments in Melbourne last month. With an equity injection of nearly $500 million, AustralianSuper and Assemble were aiming to deliver more than 1400 homes by 2027. 

Super Housing Partnerships is a specialist affordable housing manager and started working with Assemble as far back as last year.  

The new entity is touted to offer Australian-first “market-rate rental housing via an integrated build-to-rent model and home-ownership pathways via build-to-rent-to-own and build-to-sell living options”.  

“Assemble’s new capability helps solve a key challenge for institutional investors – like AustralianSuper – looking for scalable opportunities to invest in a range of housing choices to deliver appropriate risk-adjusted returns for members,” said AustralianSuper chief executive Paul Schroder. 

“Australia’s housing shortage impacts our members who provide critical services and need to afford housing near their work, as well as economic productivity that presents broader systemic risks to long-term investors like HESTA,” added HESTA CEO Debby Blakey.  

The federal government is aiming to build 1.2 million new homes by 2029 but has so far failed to stay on track to deliver that target.  

The latest federal budget put forward a $11 billion boost to housing, but prominent industry figures like Aware Super chief investment officer Damian Graham said the real cost is likely to have a few more zeros at the end. 

“I mean, we’ve built 2000 [homes] for $2.3 billion,” he said at the Investment Magazine Fiduciary Investors Symposium in May. 

“It’s a very big number [needed to achieve the target]; hundreds of billions is our back-of-the-envelope [calculation].” 

But despite the scale of that challenge, many funds have piled into affordable housing with enthusiasm. Earlier this year Cbus Super, CareSuper, Hostplus, REST and industry funds-owned IFM Investors, which collectively manage about $505 billion, have given a boost to the Housing Australia Future Fund (HAFF). The exact amount was undisclosed.  

It is a significant investment considering that less than a year ago, affordable or social housing was still trying hard to justify itself as a valid investment area.  

CEO of Housing Australia (which administers the HAFF) Nathan Dal Bon has been one vocal advocate who wants to dismantle the low-return stereotype that enshrouds the emerging asset class.  

“I think there’s probably been a bit of a misunderstanding that somehow super funds would have to compromise [if they invest in the HAFF scheme] and that is absolutely not the case,” he told Investment Magazine earlier this year.  

“There’s certainly no intention with this scheme for investors to take a haircut and that’s the way that we’ve approached this from day one.” 

Following the merger, Kris Daff will continue as Assemble managing director, and Carolyn Viney – Super Housing Partnerships’ CEO and former chief executive at collapsed property giant Grocon – has been appointed as CEO.