23 Oct Lighthouse Infrastructure secures Australia’s first social loan for Specialist Disability Accommodation from CBA and NAB
Partnership aims to propel growth in Australia’s social loan market.
Specialist investment manager Lighthouse Infrastructure (Lighthouse) has secured Australia’s first social loan dedicated to funding Specialist Disability Accommodation (SDA).
The value of the social loan exceeds AUD $130 million and has been issued in equal part by Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB).
The loan will enable the expansion of SDA assets within Lighthouse’s Australian Disability Accommodation Projects Trust 2 Fund (ADAPT2), an evergreen fund exclusively focused on long-term investments in Australian SDA. Backed by capital provided by investor Victorian Funds Management Corporation (VFMC), the Fund encompasses both the development and construction of new SDA assets and the acquisition of operational SDA properties that align with the fund’s investment criteria. Lighthouse is one of the largest institutional investors in Australian SDA assets.
In establishing the social loan CBA and NAB served as Joint Sustainability Coordinators, collaborating with Lighthouse to develop its Sustainable Financing Framework. This comprehensive framework articulates Lighthouse’s approach to undertaking and managing its social loans, while detailing the eligible social assets, projects and target populations set to benefit from the proceeds. Lighthouse sought to adhere to market best practice by aligning its framework to the Social Loan Principles issued by the Asia Pacific Loan Market Association (APLMA).
Australia’s social loan market is in its early stages of development. To date, only four social loans have been issued in total. Notably, there have been a number of social loans for affordable housing in the UK, but none in Australia for SDA until now. As awareness of social investments grows amongst institutional investors, other formats for financing SDA including social bonds may follow in the future, making Lighthouse’s debut in the social loan market an important step in the evolution of this asset class.
James Hooper, Managing Director, Lighthouse Infrastructure commented,
“We are delighted to be partnering with CBA and NAB on Australia’s first social loan supporting Specialist Disability Accommodation, which helps to finance our SDA portfolio investment. As one of the earliest institutional investors in the SDA sector, we have long believed that investment in SDA will deliver competitive, sustainable returns.
“The commitment by both NAB and CBA has the potential to kickstart growth of the SDA investment market, supporting more socially aligned assets and projects that will benefit society, individuals and investors.”
Andrew Hinchliff, Commonwealth Bank Group Executive, Institutional Banking and Markets, said:
“CBA is proud to support Lighthouse Infrastructure on its mission of ensuring that Australians living with disability can access affordable, purpose-built accommodation and the security, dignity and independence that comes with having your own home. Powerful stories of positive individual and community impact enabled by SDA illustrate the types of outcomes that social loans are designed to support. Over time, we hope to see social loans attract institutional capital to Australia’s social infrastructure in the same way that green capital has done for green assets, and we commend Lighthouse for their role in developing this market.”
David Gall, NAB Group Executive, Corporate and Institutional Banking, said, “NAB is proud to be partnering with Lighthouse and supporting the development of more diverse, modern and design-appropriate homes for Australians in need. Governments, banks, private capital providers, community groups and the property and development sector all have an important role to play in ensuring Australians can access affordable and specialist housing and NAB has committed to lending a further $6 billion to the sector by 2029.”
Further details on this social loan are featured in the Australian Financial Review article which can be accessed here.