Lighthouse Infrastructure will invest $59 million with SGCH, the largest community housing provider in NSW, to provide key-worker housing in western Sydney.
SGCH is using the funds to buy 85 apartments in Deicorp’s new Highline complex at Westmead, close to nearby hospitals, health precinct and the Parramatta campus of Western Sydney University.
The money will be invested in SGCH Keys, a registered charity and subsidiary of SGCH, the entity used to acquire and manage the apartments.
Rents will be charged at a maximum 75 per cent of market rates to key workers such as nurses or hospital orderlies unable to afford accommodation in the area.
Income from those rents will flow through to Lighthouse Infrastructure, which declined to reveal its targeted return.
The financial arrangements will be revisited in a decade and new terms or an exit agreed.
Chief executive of SGCH Scott Langford said the fact it is a single source of capital paid upfront is a major benefit.
“It’s the first time we’ve been able to get the full amount of capital in a unitranche from an investor, so that’s what Lighthouse has brought to the table,” Mr Langford said.
“Previously we’ve mostly been accessing senior debt through NHFIC [National Housing Finance and Investment Corporation] and the like.”
He said “it’s much simpler” both now and into the future should SGCH and Lighthouse choose to expand the model, which is the plan assuming all goes well.
This is SGCH’s first foray into key worker housing, Mr Langford added.
“We’ve done a lot of social housing and a lot of affordable housing but are struggling to maintain a modest standard of accommodation.”
Mr Langford said successful applications will need to meet a series of conditions including income and asset tests.
“We’ll be looking for people who are employed but don’t have the means to meet their housing needs in this location.”
Mitch King, managing director of Lighthouse Infrastructure, said the fund manager is keen to explore more opportunities in the sector.
“The Lighthouse funding model will be scaled further with other community housing partners to fund key worker housing in other states for the institutional investor market,” Mr King said.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/lighthouse-invests-59-million-in-key-worker-housing-20211105-p596hj