SDA Investment ‘En Vogue” for Family Offices, Impact, Ethical and Socially Conscious Investors
Australian Financial Revue Article on SDA Investment
The AFR article commenting on investments from various funds and family offices is great. But NDISP is also greatly concerned that if these funds flow in to terrible products with terrible outcomes then there will not be the funding needed to help all those NDIS participants that are needing somewhere to call home.
NDISP has Constant Contact from Funds and Family Offices
We have a constant stream of people contacting us wanting to invest in SDA. The first investment fund we worked with had over $100m to invest in our properties. This set us on our way to be able to help more than 3,000 NDIS participants find places they are happy to call home. We are currently looking to increase our pipeline so that we can help closer to 5,000 people and continue to work with funds, family offices and private investors accordingly.
Risk of Poor Investment
With so much money pouring into this space and with all the complex nuances there is a real risk that the significant money is being poured into poor designs or run by providers poorly so they have a significant vacancy risk. At the beginning only the worst of designs will not have tenants. But NDISP is constantly inside other provider’s products meeting with their tenants who are about to become ours. The need to get this right is important.
Can’t Reduce Rent for Poor Product
It costs the participant the same to live in a dodgy little one bedroom shoebox that are so commonly being developed inside a tower, as it does to live in one of our 100m2 internal units. Or to live in large 3 bedroom share house with ensuites, all the AT people need in great locations, versus the 4 or 5 bedroom places on the cheapest land in new estates away from everything. You just can’t reduce the rent and compensate for bad design, inferior location etc.
Returns are Awesome – Build Awesome
The returns in this space are great. There is simply no need to build or buy rubbish. When you get over $900 a sqm in rent for a 100m2 apartment, building or buying 60m2 ones that just about work will end up leading the apartment to go back to a non SDA. There is plenty of returns that leads to great outcomes for SDA participants without having to cut corners like so many do.
“Experts” Are Often Too Detached & Deliver Terrible Properties
Like the stories of the nurses moving into the brand new hospital on the first day and finding out their ward isn’t suitable for them or their patients, far too many “experts” in the Specialist Disability Accommodation space are too detached from the people living and working in them.
A lot of the old school providers unfortunately just don’t consult with the people who live in SDA properties, or even their staff that work in them. This has lead to new providers consulting with the “experts”. NDISP spent years working with the people who live and help those who live with a disability. With some of the designs around, or the “experts” we’ve talked to you wonder if they have ever even met a person living with a disability. Don’t get us wrong, there are old school providers who are doing it well, ditching tenancy management and exclusive SIL agreements and embracing choice and control, as well as funding great properties.
Great Investment Outcomes Needed – We Don’t Want Bad Properties & Bad Outcomes
For these funds to continue to flow then they need to be directed to properties that actually work. People with disability need a lot of housing, but housing that works. And so they need great investment outcomes for the investment funds to continue to flow.
We just hope that the rush to invest in this space to end up with a flood of rubbish product with vacancy issues because it just isn’t fit for purpose and so investors stop the flow of funds.
