Institutional investors are committing substantial capital to social housing in Australia.
Rising property prices mean more Australian families are in sub-standard accommodation and a recent report found that 1 million new affordable homes are needed over the next two decades.
AXA IM Alts has launched an Australian Build-to-Rent strategy with a focus on social and affordable housing. It has teamed up with social and affordable housing provider St George Community Housing (SGCH). Australia’s National Housing and Finance Investment Corporation is providing A$300 million credit line to the to the partnership.
The first project, in Westmead, Western Sydney, will provide 350 mixed tenure social and affordable homes, which will be developed by Deicorp and managed by SGCH.
Antoine Mesnage, head of Australia at AXA IM Alts, said: “This transaction and the launch of AXA IM Alts Australia’s build to rent strategy allows us to extend our global residential conviction and leverage our track record in the sector to meet the long-term investment requirements of our investors.”
Meanwhile, Australian superannuation fund HESTA has committed A$240 million ($164 million) to support the launch of a specialist affordable housing fund manager, Super Housing Partnerships (SHP).
HESTA’s capital will be channelled into the new manager’s first fund, which will initially focus on developing build-to-rent (BTR) apartment projects in Victoria. The fund will partner with affordable housing developer Assemble and Housing Choices Australia, a community housing provider.
Australian super funds will invest A$41 billion in real estate over the next decade, but will commit relatively little to affordable housing, despite demand. Barriers include a lack of large-scale developments, perceived reputational risk, and inconsistent government targets, funding and policies around new projects, a report commissioned by Industry Super Australia found.
The build-to-rent sector is relatively new in Australia, which adds to the risks for super fund investors.
The report called for tax concessions, streamlined planning and less red tape to help boost institutional investment in the sector.
Nuveen Real Estate has announced the launch of a global impact investing business line.
The investment manager, which has total real estate assets under management of $152 billion plans to build $15 billion of real estate impact AUM by 2026.
The new business line is headed by global head of impact investing Nadir Settles (pictured above), who will also remain in his current role as head of the firm’s New York office.
Pamela West, senior portfolio manager for impact investing, will oversee the framework's strategy, portfolio construction, and client relationships. She will continue to run Nuveen’s US affordable housing portfolio.
Nuveen’s impact mandate will focus on affordable and social housing and regeneration projects. It is designed to “improve communities by providing supportive services, enhancing residents' quality of life and financial outcomes, and ensuring affordable, sustainable and climate safe housing”, while at the same time supporting its 2040 net zero carbon target.
Global head of real estate Chris McGibbon said: "Nuveen is a pioneer in impact investing and we are competitively positioned to deliver a market-leading sector globally and at scale. Under Nadir and Pamela's leadership, I am confident this new sector will address some of the most pressing challenges in real estate across the globe, while creating an avenue for investors to have a significant impact through their capital investment.”
In April, Nuveen launched a German “living impact” platform, led by portfolio manager Tanja Volksheimer, which will focus on affordable housing.