Investment manager and financier Qualitas and the Clean Energy Finance Corporation have announced a new billion-dollar fund to boost the construction of build-to-rent residential developments with an energy-efficient focus.
The new fund is backed with a commitment of up to $125 million from the federal government’s CEFC, and is Australia’s first dedicated build-to-rent debt platform.
Qualitas and CEFC says it expects demand for the loans from “experienced developers” attracted to the build-to-rent space.
Qualitas managing director Tim Johansen said the Qualitas Build-to-Rent Impact Fund (QBIF) offers up to seven-year loans and a loan-to-value ratio of up to 70 per cent.
“Where the current residential build-to-sell model focuses on pre-sales debt coverage, the new fund will consider the business case of the project, and provide loans that cover both the construction and operational phases,” Johansen said.
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The group says the new fund is also Australia’s first property debt fund to lift the minimum sustainability criteria into its investment rules.
“Qualitas is determined to accelerate Australia’s transition to a low carbon economy and the ‘green’ overlay of the fund will help reduce emissions generated by residential housing,” Johansen said.
Buildings make up more than 50 per cent of Australia’s electricity use and almost a quarter of carbon emissions, with residential property accounting for about half of the emissions.
Johansen, who said Qualitas is also in discussions with institutional investors attracted to the BTR opportunity and the fund’s sustainability impact, said that CEFC’s cornerstone commitment was “instrumental” to launching the fund.
The federal government agency CEFC has committed almost $2 billion to commercial and residential property to help cut emissions by 250,000 tonnes a year.
“BTR is unique because it gives developers the opportunity to invest in energy saving initiatives that generate value over the property’s life by reducing operating costs and the exposure to rising energy costs,” CEFC chief executive Ian Learmonth said.