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Industry funds deliver on affordable housing commitment

By Jessica Penny
3 minute read

A global funds manager is teaming up with four industry funds to feed third-party capital into social and affordable housing in Australia.

Cbus Super, CareSuper, Hostplus, Rest, and IFM Investors, which collectively represent more than $505 billion in funds under management, are working together to deploy capital into the housing sector.

Through an IFM-managed investment structure, the four funds are set to partner with community housing providers to support an initial investment in social and affordable housing through the Albanese government’s landmark Housing Affordability Future Fund (HAFF), delivering on their commitments through the National Housing Accord.

The housing accord, which was originally unveiled in the October 2022 budget, includes funding to deliver 10,000 affordable homes over five years from 2024, which will be matched by up to another 10,000 homes by the states and territories.

In a joint statement on Monday, it was confirmed that the four funds have already been working closely together to explore opportunities to invest in social and affordable housing at scale.

“This collaboration recognises that changes to government policy settings mean there is now an opportunity to invest at scale and generate risk-adjusted returns for members, while at the same time helping to increase supply of social and affordable housing,” the bodies said.

HAFF passed through Parliament in September 2023 and is expected to support a pipeline of some 30,000 social and affordable dwellings over the next five years, including 4,000 homes for women and children impacted by family and domestic violence and older women at risk of homelessness.

The package of housing legislation also includes the National Housing Supply and Affordability Council Bill 2023, which will establish the National Housing Supply and Affordability Council as an independent statutory advisory body.

Commenting on the partnership, IFM Investors chief executive David Neal said: “Through this collaboration, we have the potential to protect and grow the retirement savings of working people by investing in much needed affordable housing.

“We are proud to be part of this collaborative effort to deploy capital at scale and support the work being done to tackle the housing affordability crisis in Australia.”

Hostplus chief executive David Elia added that super funds play a significant role in the large-scale debt investment in social and affordable housing.

“This collaboration demonstrates our capacity and willingness to do so when the investment settings are optimised to deliver member returns,” Mr Elia continued.

Last year, Cbus also committed up to $500 million over five years to the HAFF as part of the National Housing Accord.

More recently, HESTA announced work had started on an innovative build-to-rent (BTR) apartment development in Melbourne’s inner west with specialist affordable housing fund manager Super Housing Partnerships, the first in a pipeline of such projects aimed at increasing the supply of affordable and social housing.