Social Infrastructure ‘awakening’ as a property asset class: PFA Conference

23rd June, 2022 | No Comments

Social Infrastructure is not new in commercial property investment, but there has been an ‘awakening’ in the sector, according to Ryan Banting, General Manager Social Infrastructure at Australian Unity.

Mr Banting said social infrastructure is a broad church, which means many things to many people. “It’s about how can we invest to improve the lives of communities, referring to many interconnecting services and facilities that address basic societal needs and contribute to social wellbeing.

“Social Infrastructure is a sector genuinely changing to move more toward the core.

“The numbers behind this trend are big: We need to provide more than 28,000 dwellings for disabled people, we need 400,000 more aged care workers due to demographic change. We need around 3,000 more childcare centres than we have today, and 50,000 more student accommodation places by 2030.”

He said government tailwinds, via its infrastructure pipeline, was creating huge opportunities to deliver value throughout the community. “Childcare addresses key themes important to community wellbeing – it would be difficult to have an unemployment rate at 4% or below without childcare centres.

“The sector has matured in Australia, after a chequered history in the early days, and has tremendous support. Economically, there’s a four-to-five dollar benefit from every dollar spent on childcare, so there’s a commitment to getting it right.

“These assets are also attractive, particularly in a rising interest rate environment, as long leases are common, and they can provide an inflation hedge from a real asset with an income stream frequently tied to inflation.”

Other social infrastructure sectors to watch include specialist disability accommodation, student accommodation and retirement living. “In specialist disability accommodation we’re just scratching the surface on what can be achieved. There is a huge demand tailwind in this space.

“In student accommodation, Australia is still an attractive education destination for international students, with the added benefit of a first-class healthcare system, having successfully traversed the past two years of the global pandemic.

“Retirement living is essential to Australia and we need to meet rising demand. There is opportunity for consolidation in this area.”

Mr Banting presented on Social Infrastructure at the Property Funds Association (PFA) 2022 Conference in Cairns.

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