QIC has teamed up with the Australian Retirement Trust (ART) to finance new social and affordable housing supply across Queensland.
This innovative investment partnership, in collaboration with Brisbane Housing Company (BHC), an established provider of social housing, offers a scalable framework for the funding, creation, and management of social and affordable housing across the state.
The cooperation is expected to create up to 1,200 new houses, most of which will be social and affordable housing. All projects are expected to start building by 2025.
Through the cooperation with QIC, ART is providing funding with the Queensland Government to facilitate the execution of seven projects by the QIC-BHC Social Housing Consortium, totalling roughly 600 homes, in their first stages.
The first two projects to commence will be on Sutton St, Redcliffe and Ethel Street, Chermside, with residents able to move in during 2024. The remaining South-East Queensland sites will be announced once they are secured.
Ryan Murphy, QIC’s director of real estate strategy said the group had been exploring residential real estate investment opportunities before landing the new partnership.
“It’s a sector which we’ve been taking some interest in for some time now, and we saw the opportunity in social and affordable housing to support the Queensland Government’s Housing Investment Growth Initiative,” he said.
“It’s a great initiative from them to really get behind so that there is the ability to introduce private investment as one of the solutions to help increase the supply of housing.”
The Queensland Housing Investment Growth Initiative (QHIGI) was established last year to accelerate the delivery of 6,356 new social homes through a $1.8 billion investment in a four-year, integrated capital investment program.
Through a framework to increase housing supply, the QHIGI offers chances for a variety of people, organisations, developers, and housing providers to provide additional homes for those who need it. This covers access to underutilised government-owned property as well as a coordinated, cross-government response to planning and economic development prospects.
“QIC is really seeking investment opportunities on behalf of our clients, which provide a positive ESG contribution as well as providing appropriate returns,” Murphy said.
“That has been the challenge with private investment in social and affordable housing, because by definition, there is a gap there, where the revenues or the rents being provided or able to be paid by the residents, is below what you would typically meet for commercial return.”
BHC Chief Executive Officer, Rebecca Oelkers said the program is an “exemplar of how state governments and institutional investors can work together with the community housing sector”.
“It will change the lives of countless Queenslanders who are in dire housing need,” she said.
“In Queensland, there’s 50,000 people waiting on the public housing register, across Australia, there’s around 600,000 people who are living in really dire housing stress. So the actual quantum of the problem that we’re trying to solve is huge.”
Oelkers hopes that partnerships, like the one with QIC, BHC and ART, can pave the way for more players to be involved.
“Getting those parameters right, getting the risk return mechanism right, is hugely important,” she said.
“The thing that I would like to see is that it’s more of a plug and play model. If you can achieve this, then if you have government funding, and you have a housing provider that is able to fit into those roles, then you should be able to make that deal work.”
Australian Retirement Trust’s Head of Sustainable Investment, Nicole Bradford, said the deal is the super fund’s first social issue-focused investment since the merger between Sunsuper and QSuper earlier this year.
“We believe this investment opportunity will support more affordable housing in Queensland, while also maximising the real, long-term investment returns for our more than two million members,” she said.