ALTERNATIVE investments manager AXA IM Alts has launched into the Australian build-to-rent market with a focus on social and affordable housing through a partnership with the St George Community Housing (SGCH) and the National Housing and Finance Investment Corporation (NHFIC).
NHFIC are providing a A$300 million umbrella facility to the partnership to deliver social and affordable housing and the first project at Westmead, in Western Sydney which will deliver approximately 350 social and affordable dwellings.
Located adjacent to the new Westmead Health and Innovation Precinct, the project will be managed by SGCH and delivered by Deicorp. Upon completion in 2025, the property aims at offering best-in-class sustainability credentials, targeting to be operationally net zero and a 5-star Green Star rating, equivalent to the international BREEAM Excellent rating.
The landmark deal is a proof point for affordable housing and marks the first time NHFIC, a community housing provider and institutional capital have come together to deliver at scale under a replicable model.
AXA IM Alts head of Australia Antoine Mesnage said this transaction and the launch of AXA IM Alts Australia’s build to rent strategy allows it to extend its global residential conviction and, “leverage our track record in the sector to meet the long-term investment requirements of our investors.”
“Westmead is an area with one of the highest concentrations of key workers nationally and is set to benefit from the expansion of the surrounding health and innovation precinct over the coming decade. We recognise the need for quality key worker housing in major employment hubs across Sydney, and our first project in Westmead will offer a solution to these workers who are essential in supporting the needs of the community.
“Our commitment to the Westmead project, along with our strategic partnership with SGCH and NHFIC will allow us to bring forward much needed supply of high quality, sustainable and affordable new homes, while aligning with our broader ambition of investing with purpose to help improve society and quality of life.” Mesnage said.
AXA IM Alts has a global track record investing in affordable housing – with over A$35 billion invested in the residential sector globally.
Scott Langford, group CEO of SGCH said it was excited to be bringing together institutional capital with capability of major partners and the support of NHFIC to increase the supply of affordable and sustainable housing through regulated not for profit community housing.
“Thriving communities and vibrant economies depend on a diversity of people being able to live, learn, work, and play to create great places.
“We thank NHFIC for their catalytic role in mobilising this institutional investment that will create more affordable homes for rent,” he added.
Nathan Dal Bon, CEO of NHFIC, said: “This is a ground-breaking agreement that clearly demonstrates how NHFIC can partner with the community housing sector and institutional investors to find innovative new ways to deliver much-needed affordable housing.”
This deal comes hot on the heels of SGCH extending its partnership with Lighthouse earlier this month.
Meanwhile Australian industry superannuation fund HESTA last week committed $240 million to a new specialist affordable housing fund manager’s first fund, which will focus on a blend of affordable, social, market-rate and specialist disability housing.
These deals are marking a turning point for social housing in Australia following a decade of neglect. For investors and the community – social housing is a win-win. A Housing For All Australians (HAA) report, Give Me Shelter, found that the national average benefit-cost ratio (BCR) for Australia in providing adequate social and affordable housing infrastructure is 2:1. In other words, for every $1 invested to drive the delivery of public, social and affordable housing, the Australian community saves $2 in future costs. This rate of return is comparable to, or better than, those achieved in many other major investments in infrastructure including Melbourne Metro (1.5:1) and the M12 Motorway Sydney.
APJ reported that Australia is estimated to need 36,000 affordable social housing properties per annum and is only producing a 12th of that number prior to the pandemic. Research from Duncan Rouch showed there are at least 119,000 people on a multi-year waitlist for social housing, with the real number likely a lot higher.
A recent report found women and children fleeing from domestic violence are at greater risk of homelessness, simply because there isn’t enough housing.
Equity Economics estimates that 9,120 women and children face homelessness each year after leaving a violent partner.
Of those, 39,408 in FY20 sought long-term housing, but only 1,233 – or 3.1% – were provided with housing. Nothing was provided to more than 30,607, or 77.4%, while less than one in five were referred.
Altogether, a staggering 37,867 people missed out on long-term housing, while some may have secured private rental accommodation, others will have returned to live where their perpetrator, or become homeless.
