Social Impact Property Fund
14 April 2010 at 1:46 pm
The Assistant Treasurer, Nick Sherry has launched a new property fund, set to provide direct social impact, as part of Social Investment Australia.
Called the Social Impact Property Fund it will provide wholesale investors with direct exposure to risk managed properties for community sector organisations that make a positive social contribution to their communities.
Peter Aubort, SIA’s Executive Director says the Fund has been created to address failures in existing capital markets and provide sustainable futures for Australia’s Not for Profit sector.
Aubort says it is unique in that it will provide long-term property leases to community sector organisations (CSOs) and build their capacity to purchase the property at lease maturity, while providing a target return of 5.5% to investors in the fund.
He says SIA will invest in commercial property in metropolitan and major regional centres located in Queensland, New South Wales and Victoria. The properties will be used by community sector organisations as their office premises from which they will deliver a range of services.
Senator Sherry says that building the asset base of the Not for Profit sector is crucial to its development and sustainability.
He says this will require vehicles that are able to attract institutional, philanthropic and private investors and the Rudd Goverment is actively considering the role it can play in enabling access to finance for the sector.
He says funds such as this offer investors an opportunity to invest directly in the capacity and future of the community sector.
According to the Productivity Commission Report, January 2010, there were more than 5,804 community sector organisations ranging in annual turnover from $250,000 to more than $3.5M, with the sector growing at an average rate of 7.8% in the seven years to 2006 – 2007, which is more than double the real growth of the Australian economy for the same period.
Peter Aubort says SIA is providing Australian investors with an opportunity to provide organisations who deliver community health, legal, domestic violence protection, migrant assistance, youth services, services for people with a disability, families at risk and aged services with stable tenure in quality premises that are easily accessible by communities in need.
Christopher Thorn, Executive Director of JBWere says building these organisations financial capacity to purchase the same property by the end of the lease period (seven years), SIA is increasing asset ownership in the community sector which in turn strengthens the social fabric of this country.
SIA is a wholly owned subsidiary of Foresters Community Finance Limited. www.foresters.org.au