Housing Australia has signed a $517-million deal with the Victorian government to help provide 1370 new homes in Melbourne.
The deal is part of a partnership with Community Housing (Vic) Limited (CHL), the state government and industry.
It includes the issuing of a new sustainability bond for 15 years at a fixed rate that closed this week at $422 million with the total issuance over $2.6 billion. Rated AAA and guaranteed by the government, it was almost twice oversubscribed.
It will help deliver more than 650 social, 180 affordable, 470 market rate and 55 specialist disability accommodation.
The social and affordable components will target women and children at risk of homelessness and Aboriginal and Torres Straits Islander people.
“At more than half-a-billion dollars, this is our largest lending deal and we are delighted that the sustainability bond that is largely funding this project has attracted interest from investors including new superannuation funds,” Housing Australia chief executive Nathan Dal Bon said.
Commonwealth Bank of Australia, UBS and Westpac are joint lead managers supporting Housing Australia.
“We had strong oversubscription that resulted in a granular order book, highlighting institutional investor support for Housing Australia and continued strength of Australia’s high-grade fixed income market, despite a backdrop of ongoing rates volatility and geopolitical risks,” CBA global markets executive general manager Chris McLachlan said.
CHL and Tetris Capital will lead a Building Communities Consortium that will include specialist providers Women’s Property Initiatives and Aboriginal Community Housing Vic Limited.
There will be housing projects at South Yarra, Prahran, Hampton East and Port Melbourne where new homes will be built.
These projects are part of the Victorian government’s Ground Lease Model 2 project.
The consortium will lease the land from Homes Victoria on an availability basis to design, build, finance, manage and maintain the housing for the first 40 years. It will remain in the ownership of the Victorian government.
Housing Australia has previously supported the Ground Lease Model.
This current transaction has a loan facility of up to $422 million through the Affordable Housing Bond Aggregator (AHBA) and $95 million through the National Housing Infrastructure Facility (NHIF).
The NHIF allows for critical trunk infrastructure work needed to get projects off the ground to be funded and includes stormwater drainage systems, replacing sewer lines, realigning power lines and remediation and road works.
CHL will reinvest funds generated from the projects into other social and affordable housing projects.
“We have had a successful partnership with Housing Australia since its inception and most notably on the ground lease model project,” CHL managing director Steve Bevington said.
“Their ongoing commitment to funding large scale new social and affordable housing is commendable as it enables community housing providers such as CHL to provide much needed homes for hundreds of Victorians at an accelerated rate.
“With success, we hope that the model is replicable for the renewal of public housing nationally.”
Housing Australia has now provided nearly $4 billion in funding for the community housing sector with more than 19,000 new and existing social and affordable homes supported.
