Conscious Investment Management is the cornerstone investor in a $150 million fund to buy a range of properties, across Melbourne, that will be allocated as social and affordable housing.
The firm will partner with HousingFirst, a community housing association, and state government agency, Homes Victoria, to purchase 307 newly built apartments. These organisations will manage the allocation of homes to people on the Victorian Housing Register, which currently has more than 50,000 people on its waitlist.
Alleviating the lack of social and affordable housing has a huge potential for impact, and forms part of the Victorian Government’s New Rental Development Program. The project won’t buy entire apartment buildings, instead, their allocations will be dispersed, with no more than 20% of any building being chosen.
“We are delighted to be working with HousingFirst and the Victorian Government to provide much needed homes for vulnerable Victorians.” says Matthew Tominc, CIO of Conscious IM.
“Social housing has historically been a challenging area for private capital investment to receive market rate returns. Through this innovative investment structure, we hope to prove up a model that provides government with long term savings, social housing tenants with access to secure housing and private investors with market rate property returns.”
Under the scheme, rent will be subsidised by state agency Homes Victoria. It forms part of the Victorian Social Housing Growth Fund announced by the Minister for Housing in 2018.
Paul Ramsay Foundation will be the largest co-investor behind Conscious IM, with Abhilash Mudaliar, the foundation’s Chief Portfolio Officer, and CFO, David Winterbottom, both sitting on the property investment committee for this transaction. The funding will come from the PRF corpus, rather than the programs bucket, as foreshadowed in a previous article.
Future Super will also allocate to the fund. Founder and Director, Adam Verway, explains the superannuation manager recognises the broad social benefits of securing housing for the most vulnerable.
“CIM social housing and Future Super are contributing to the solution of providing safe, affordable, and modern housing to vulnerable people, and in turn, it will contribute to better life outcomes for all tenants compared with homelessness, the threat of homelessness, and the financial pressures that often lead to family breakups or violence.” Adam says.
So far, the project has acquired 123 apartments since project inception in August.