Australian super funds Cbus Super, CareSuper, Hostplus, and Rest have partnered with IFM Investors to create a vehicle to invest in the housing sector, starting with social and affordable projects.
The four super funds and IFM Investors, which together represent more than A$505bn (€306bn) in funds under management, aim to collectively provide long-term debt to community housing providers (CHPs) through the Australian Government’s Housing Affordability Future Fund (HAFF).
The inaugural HAFF funding round is now open and will close next month. Some 300 potential applicants have registered with Housing Australia, which will administer the A$10bn HAFF.
HAFF is expected to generate an annual return of around A$500m which would be used as “availability payment”. It is understood that this money would be used to plug funding gaps to help investors like super funds obtain an acceptable risk-adjusted return on their investment in affordable housing.
IFM Investors chief executive, David Neal said this collaborative effort would enable deployment of capital at scale and support the work being done to tackle the housing affordability crisis in Australia.
Andrew Lill, Rest CIO, said the housing affordability crisis was undoubtedly a huge challenge but tackling it could significantly improve the financial security for many of our members. “We represent around 1.25m members aged under 35, and we know housing affordability is a driver of financial stress for many of them.”
Brett Chatfield spoke of “the leading work” Cbus had done in contributing to these innovative models that were expected to deliver strong investment returns for members and more secure and affordable housing for vulnerable Australians.
Hostplus CEO, David Elia, said: “We recognise the role that super funds can play when it comes to large-scale debt investment in social and affordable housing, and this collaboration demonstrates our capacity and willingness to do so when the investment settings are optimised to deliver member returns.”
Suzanne Branton, CareSuper CIO, said: “CareSuper is supportive of government initiatives that bring together Community Housing Providers and institutional investment on a large scale to help address housing affordability in Australia.”
To read the latest IPE Real Assets magazine click here.
