HESTA’s $240 million investment in the launch of Super Housing Partnerships (SHP) will seed the fund’s initial focus on a pipeline of build-to-rent (BTR) apartment projects in Victoria.
SHP seeks to provide solutions to increase the supply of affordable, sustainable and appropriate housing choices, and connect institutional investors with access to equity investment in new BTR housing projects.
HESTA CEO Debby Blakey said the fund’s investment in SHP’s pipeline of projects aims to generate long-term stable returns for members, while also catalysing the emerging investment sector.
“HESTA and SHP through establishing this unique approach have effectively built the pipes and pumps to allow institutional capital to flow towards addressing our national housing crisis,” Ms Blakey said.
“We have the opportunity to innovate and invest to meet an unmet need, providing our members with appropriate risk-adjusted investment returns by improving housing supply,” she noted.
“A lack of access to housing impacts our members who provide critical services and need to afford housing near their work and economic productivity that presents broader systemic risks to long-term investors like HESTA.”
SHP plans to address some of the barriers to institutional investment in affordable housing at scale through an aggregator-style platform, focusing on social and affordable housing unique to the Australian market.
Namely, it will accumulate capital from institutional investors into the fund’s housing strategies, potentially representing more than 1,600 mixed-tenure dwellings — a blend of social, affordable, market-rate and specialist disability accommodation.
The mixed-tenure approach will provide improved social outcomes while cross-subsidisation strengthens investment outcomes.
This approach will give resilience to changing economic conditions and support investment returns by providing a smooth income profile with stable rental income, low vacancy rates and high demand.
SHP venture partner Kris Daff said: “We welcome HESTA’s significant $240 million initial investment as this commitment demonstrates the value of SHP to large institutional investors seeking real assets while delivering vital outcomes for Australians struggling to access secure housing.”
According to Mr Daff, SHP is currently working with key strategic development partners for the delivery and operation of assets nationally, expanding on its initial Victorian portfolio.
SHP’s first fund will partner with Assemble, a leading affordable and sustainable housing developer and Housing Choices Australia, one of the country's largest accredited community housing providers.
Moreover, all SHP housing projects aim to be net zero operational carbon from day one, with the fund manager due to measure impact outcomes against United Nations Sustainable Development Goals.
HESTA believes that improved policy settings at all government levels would also encourage institutional investment on a greater scale.
The industry superannuation fund will support the Federal Government Housing Accord, with Ms Blakey participating in this week’s investor roundtable.
According to Ms Blakey, “HESTA and SHP, through establishing this unique approach have effectively built the pipes and pumps to allow institutional capital to flow towards addressing our national housing crisis.
“We’re now looking to work with all levels of government to address blockages that are holding back institutional investment at scale,” she concluded.
HESTA previously voiced its support for the federal government’s Housing Accord, which was announced in Labor’s first budget in October.
