HOUSING Australia has signed its largest leading deal, with $517 million support the delivery of 1,370 new affordable homes across Melbourne.
The deal has been signed in partnership with Community Housing (Vic) Limited (CHL), the Victorian Government, and industry, and will be primarily provided by a new sustainability bond issuance that closed yesterday.
“At over half a billion dollars, this is our largest lending deal and we are delighted that the sustainability bond that is largely funding this project has attracted interest from investors including new superannuation funds,” said Nathan Dal Bon, CEO at Housing Australia, which was recently rebranded from the NHFIC.
The 15-year AAA-rated government-guaranteed bond is a fixed-rate note of $422 million, taking total issuance to over $2.6 billion.
The bond was almost two times oversubscribed with a range of new and existing investors taking up the opportunity, including insurers, superannuation funds and international investors.
“The strength of investor demand shows clear appetite to support social and sustainable housing within Australia. It is a testament of the hard work and determination by everyone at Housing Australia in fostering the investor base to what it is today,” said Nick Kalisperis, executive director at UBS.
The deal will see the circa 500 existing dwellings on the four sites replaced with over 650 social, 180 affordable, 470 market and 55 specialist disability accommodation homes delivered.
Representing a 31% increase in social housing across the sites, including a 46% uplift at Port Melbourne alone.
This comes after the Victorian controversial pitch to redevelop of all 44 of Melbourne’s public housing towers, despite concerns from many about the upheaval of residents amidst an ongoing housing crisis.
The accommodation will target women and children at risk of homelessness and Indigenous Australians for the social and affordable components.
The Building Communities Consortium, led by CHL and Tetris Capital, and including specialist providers Women’s Property Initiatives and Aboriginal Community Housing Vic Limited, will deliver the homes across four housing projects in South Yarra, Prahran, Hampton East and Port Melbourne.
This will be as part of the Victorian Government’s Ground Lease Model 2 project (GLM2), with Homes Victoria to lease the land to the consortium under an availability model to design, build, finance, manage and maintain the housing for 40 years, with the land remaining in Victorian Government ownership.
The Housing Australia funding for GLM2 comprises a loan facility of up to $422 million through the Affordable Housing Bond Aggregator (AHBA) and $95 million via the National Housing Infrastructure Facility (NHIF).
“We have had a successful partnership with Housing Australia since its inception and most notably on the ground lease model project,” said Steve Bevington, managing director at CHL.
“Their ongoing commitment to funding large scale new social and affordable housing is commendable as it enables community housing providers such as CHL to provide much needed homes for hundreds of Victorians at an accelerated rate. With success, we hope that the model is replicable for the renewal of public housing nationally.”
The loan takes Housing Australia’s funding to the community housing sector since to nearly $4 billion, supporting more than 19,000 new and existing social and affordable homes.
The Ground Lease Model 1 project is on track to deliver more than 1,000 homes by early 2024 across three sites in Brighton, Flemington and Prahran, with a further 285 homes in Flemington by the end of 2026.
There are currently around 58,000 households on Victoria’s public housing waiting list. With the state government noting around 9,373 people already living in social housing have applied for a transfer to a new property. With social housing accounting for just 2.9% of all dwellings across Victoria, the lowest stock of any state.
And Victoria seeing a with a 24% overall increase in homelessness over the last five years, with one in two areas experiencing growth of more than 20%. At the same time, the state has seen a 5.3% increase in the use of homelessness services between December and March, according to Homelessness Australia.
While across the country, over 640,000 households’ housing needs are not being met, and the number is set to jump to 940,000 by 2041, according a recent report by Community Housing Industry Association (CHIA).
