Super funds collab to invest in affordable community housing

Four Australian superannuation funds have collaborated with IFM Investors to invest in affordable social and community housing to increase the supply and reduce soaring pressure on the market.

Cbus Super, CareSuper, Hostplus and Rest are the four funds to broker the deal, representing over $505 billion in funds under management (FUM), and will jointly work with community housing providers to inject capital through the Commonwealth Government’s Housing Affordability Future Fund (HAFF).

The partnership seek to invest in social and affordable housing at scale while delivering long-term risk adjusted returns for members.

“I’m proud of the leading work Cbus has done in contributing to these innovative models that are expected to deliver strong investment returns for our members and more secure and affordable housing for vulnerable Australians,” Cbus Super Chief Investment Officer, Brett Chatfield, 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, while providing an appropriate investment return to CareSuper members,” CareSuper Chief Investment Officer, Suzanne Branton, said.

IFM will be responsible for the managed investment structure through which the funds will support applicants in the first round of the HAFF program by providing long-term debt to Community Housing Providers, helping the Government achieve its goal of delivering 40,000 new social and affordable rental properties in the first five years of the program.

The Community Housing Industry Association said it “strongly endorses” the decision.

“The housing needs of more than 640,000 Australians are not being met and unless something substantial changes, that will surge to one million Australians by the end of next decade,” Wendy Hayhurst, chief cxecutive of the Community Housing Industry Association, said.

“To combat the housing crisis, we really need all hands to the wheel, which is why this announcement from industry superannuation is so significant.

“Community housing is cost effective with a proven and sustained track record. We strongly endorse this announcement and look forward to working closely with industry superannuation investors, both to deliver returns for their members while also tackling Australia’s most difficult social and economic challenge, the housing crisis.”

The announcement comes as the ninth Affordable Housing Development & Investment Summit commences in Melbourne, bringing together leading figures in property, housing and finance.

“Hostplus is excited to contribute to this collaboration, highlighting the potential for strong long-term returns for our members based on its risk-return attributes. We also 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,” Hostplus Chief Executive Officer, David Elia, said.

“The housing affordability crisis is undoubtedly a huge challenge but tackling it could significantly improve the financial security for many of our members. We represent around 1.25 million members aged under 35, and we know housing affordability is a driver of financial stress for many of them. We’re excited about the potential of this partnership and the impact it could have on our members’ lives, both through growing their retirement savings and helping to address housing affordability,” Rest Chief Investment Officer, Andrew Lill, 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,” IFM Investors chief cxecutive, David Neal, said.