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Generate KiwiSaver pumps $13.7 mill into social housing

4 Mar, 3:33pm

Generate KiwiSaver has made a second investment into social housing.

Generate KiwiSaver Scheme has made a $13.7 million impact investment into the Te Puna Hapori - Verdi Social Housing Bond.

The deal provides funding for two new social housing projects, which will house 39 families (at least 78 people) currently living in sub-standard accommodation.

The lessees, Emerge Aotearoa and the Salvation Army, will each lease one of the developments and offer them as safe and affordable housing for families who cannot afford their own homes.

The leases are further underpinned by contracts between the lessees and the Ministry of Housing and Urban Development (MHUD).

The deal is a win for both the future housing tenants and members of Generate KiwiSaver Scheme, delivering investors both a sound investment return and social impact. The bond is split
into two tranches, each with fixed interest returns over at least five years backed by a stable profile of payments from long-term leases.

“Responsible investment is one of our core values at Generate and this investment really ticked all the boxes for us,” Generate fixed income portfolio manager Ayrton Oliver says.

“The Te Puna Hapori - Verdi Social Housing Bond, allows us to use our investing power to create positive change in our community, while still delivering attractive returns for our members,” he said.

The bond is the first impact investment delivered in New Zealand by Brightlight, an impact investment management firm committed to transforming lives through investments across Australia and New Zealand.

Impact Investing is nothing new to Generate. In 2020 Generate was the first KiwiSaver scheme to invest in social housing via a $21 million investment into Salvation Army community bonds, which
helped build 118 new warm, dry, affordable community houses across three locations.

Financial Planning