Build to Rent

CA-SocialReturn

CapitalAsset is an initiative of Shelter SA, a build to rent model that removes the cost of land from housing construction. The aim of CapitalAsset is to assist in the development of innovative financial models that can provide housing for people living on low incomes.

Working with Shelter SA on CapitalAsset are some high-profile South Australians including economists, bankers, architects and developers in industry/business who are generously giving their time and intellectual property pro bono, as they can see the benefits of not being hindered by bureaucratic processes, or waiting for policy/legislation change.

Creates cash flow
Benefit of capital growth
Retain land assets for the benefit of communities and social mission
Reverse the financial drain of underutilised and unused land and buildings

Remove the cost of land from construction costs

When land is owned freehold, the substantial cost of land can be removed from the cost of new construction
Freehold land can be used as a security to borrow

A program of construction

Shelter SA aims for this model to
Become a program of redevelopment and consolidation of underutilised land to create low income housing and infrastructure
Provide opportunities for commerce students/graduates to work with us on developing proposals to not for profits and additional housing finance models
Explore private and institutional investment in this type of construction

Financial Modelling

Our financial modelling on a demonstration project site in the City of Prospect provides the following evidence,
Value of land = $2 million
Cost of construction = $9 million
Total of 42 units = 12 x units for people living on low incomes at income-based rents (30% of household income) + CRA
30 x units for market rents
The not-for-profit landowner can borrow at less than 2%
5.9% annual return on investment
Some or all of the units can be sold after 10 years to avoid major maintenance costs
Or after 30 years the not for profit can own the units outright (whatever suits the owner’s strategic plan/clients/mission)
Or, building retirement village style housing, so that the cost of sub-dividing land is not necessary. The market 'sale' of one third of the homes under a right to occupy model, to achieve construction finance, with the remainder of homes being long term rentals for people living on low incomes, utilising modular housing to improve affordability and quicker construction. Partnerships between land owners and builders can potentially take the cost of the land out of construction.

CapitalAsset buildings will:

Provide housing for people living on low incomes
Be environmentally sustainable and energy efficient
Be well designed and built with high quality materials and amenity levels
Generally, be in inner suburbs with better access to employment opportunities and strong potential to provide a social mix of residents and rental streams
Be of a scale that can provide ongoing employment opportunities for residents
Assist to improve cash flow and asset values
Does not require any government land or funding