Alternative investment provider AXA IM Alts has secured a A$100m investment from the Clean Energy Finance Corporation (CEFC) into its Australian Build to Rent affordable housing strategy.
The CEFC’s investment will bring total equity commitments raised for the strategy to A$320m, enabling AXA IM Alts to further advance its objective of delivering sustainable and affordable homes across cities such as Sydney, Melbourne and Brisbane.
This strategy will initially target the development of up to 3,000 apartments, with over half designated as affordable housing for key workers. Its first development in Westmead, Western Sydney, commenced in December 2022 and, with construction well advanced, is expected to complete in late 2025.
The three-building development will comprise 397 units, with capacity to house close to 1,000 residents, offering much needed affordable accommodation for essential workers such as healthcare professionals, teachers and emergency response staff.
“The CEFC’s investment is an important milestone in the continued success of our Australian afforable housing programme and our wider global residential strategy, which we intend to grow alongside new capital partners.
“It also reflects our shared approach to addressing the shortage of good quality, sustainable housing stock for key workers in Australian cities.
“We have strong ambitions to continue to expand this residential strategy in Australia, allowing our clients to benefit from AXA IM Alts’ global expertise and local knowledge in the sector.
“The support of established and like-minded institutional investors such as the CEFC, as well as the strong pedigree and operational expertise in affordable housing of our operational partner St George Community Housing, will be invaluable to helping us achieve that growth.
“The Westmead project, our strategy’s first investment, is expected to complete in 2025 and will aim to enable essential workers to live in good quality, institutionally managed accommodation closer to their place of employment.
“We seek to replicate this model at scale across Australia, with an initial focus on Sydney, Melbourne and Brisbane, and we have numerous pipeline opportunities identified to grow and diversify the portfolio further.
“Additionally, in supporting the transition to a decarbonised economy, we are targeting market-leading environmental and social credentials across the assets that aim to deliver strong ESG and impact outcomes, and long-term value to our investors as well as the local community.”
Antoine Mesnage, Head of Australia, AXA IM Alts
The strategy will leverage AXA IM Alts’ long term experience in managing its extensive global residential property portfolio, which forms part of the over A$182bn in real estate assets it manages, including developments.
The portfolio includes approximately A$37bn in residential developments across over 1,000 properties, providing more than 55,000 units of accommodation.
With this, AXA IM Alts manages a global affordable housing portfolio valued at over A$4bn, comprising more than 160 assets and over 13,000 units.
“To effectively reduce emissions in the property sector, sustainability needs to be at the heart of all developments. “Tenants can face challenges in implementing energy efficiency and emissions reduction measures in their rental properties.
“This new strategy is an important step in an equitable energy transition, taking an integrated approach to leverage global best practice and drive clean energy outcomes to provide benefits to tenants, and more broadly to help to address housing supply and affordability.
“This investment brings the benefits of sustainability to an important segment of Australia’s residential sector, at scale.
“Making homes more resilient, healthy and comfortable by lifting sustainability standards helps meet our current and future housing needs as we move towards net zero emissions and unlocks the advantages of sustainable living for more Australians.”
Ian Learmonth, CEO, CEFC
The strategy’s developments will be fully electrified and powered by 100% renewable energy. Future projects will focus on achieving minimum 5-star Green Star Buildings certification and an average 7.5-star NatHERS home energy rating.
This approach underscores AXA IM Alts’ commitment to delivering both social and environmental impact, while also targeting long-term value for investors and the community.
By leveraging the global expertise of AXA IM Alts and the local knowledge of St George Community Housing (SGCH), the partnership will create a replicable model to expand affordable housing supply nationwide, helping Australia meet its decarbonisation goals while addressing critical housing shortages.
