HESTA has made a $6.7 million investment in Horizon Housing, a community housing provider operating in Queensland, which is focused on increasing the supply of social and affordable housing and helping low income earners achieve home ownership in targeted areas.
The super fund, which has more than 800,000 members working in health and community services, made the investment through HESTA’s $30 million Social Impact Investment Trust that seeks to invest in opportunities that deliver both a financial return and a measurable social impact.
Managed by Social Ventures Australia (SVA), the Trust is one of Australia’s largest impact investment funds and represents the biggest single commitment by an Australian superannuation fund to the local impact investing market.
Through the Trust, HESTA and SVA aim to build a pipeline of investments and grow Australia’s impact investment market by attracting other institutional investors.
HESTA CEO Debby Blakey said the investment could make a meaningful social impact — not only through providing capital to the sector — but also by developing investable models that address social and affordable housing challenges.
“Many of our members are familiar with the difficulty of accessing affordable housing and achieving home ownership,” Ms Blakey said.
“So, it’s appropriate that HESTA’s first Australian impact investment has the potential to both earn a financial return and help address a social issue impacting the community and our members.”
This investment will involve the Trust partnering with Horizon Housing to finance the purchase of management rights for 995 existing affordable housing properties and the future development of up to 60 new social and affordable homes. Horizon Housing has properties and projects across 15 local government areas in Queensland and northern New South Wales.
SVA’s Executive Director of Impact Investing Ian Learmonth said investment by superannuation funds like HESTA made it possible to fund more projects at the scale needed to make a meaningful impact to social and affordable housing challenges.
SVA and Horizon Housing have also secured a majority stake in Australian Affordable Housing Securities (AAHS), an entity responsible for managing compliance of National Rental Affordability Scheme (NRAS) incentives for over 2,500 properties. Through AAHS, SVA and Horizon Housing plan to develop innovative financing products to assist low income earners achieve home ownership.
“There is a great need for social and affordable housing in Australia, with a shortfall of over 500,000 dwellings across the country,” Mr Learmonth said.
“Through impact investment there is an opportunity to bring new capital to the issue to achieve both social and financial returns, and we’re actively looking for more deals in this space.
“This partnership with Horizon Housing will provide greater choice and security of tenure for social housing tenants, helping them to transition to the private housing market. It will also provide much needed additional supply of social and affordable housing for Queensland.”
Horizon Housing’s Chief Executive Officer, Jason Cubit, said: ‘We’re thrilled to be teaming up with SVA and HESTA to develop new ways of providing access to those most in need of social and affordable housing.
“We believe the key to increasing the supply of affordable housing is through innovative partnerships that leverage the skills and experience of different sectors.”