The SDA Subsidy was established by the NDIS to incentivise institutional investment to deliver the quantum of housing required to replace old disability housing settings, such as large congregant housing, aged care or long-term hospital stays. It’s a sector that requires investors to have a deep understanding of participants’ care needs, strong partnerships with SDA providers and institutional scale.
Unfortunately, as recently reported by the Australian Financial Review, some investment schemes are often being wrongly advertised to retail investors with promises of unrealistic government-guaranteed returns of up to 17 per cent per annum.
While the NDIS has taken steps to warn investors of false and misleading advertising and deceptive and predatory conduct, we continue to see unsuspecting and ill-informed retail investors duped by property spruikers and developers with no credibility in the SDA sector.
As Manager of the Australian Unity Specialist Disability Accommodation Fund and director of the SDA Alliance, I share the sector’s and broader community’s concerns about the questionable business practices of some operators.
Specialist Disability Accommodation is a complex sector that requires expertise. Many retail investors lack the specialist SDA knowledge required in order to discern between best practice SDA design, establishment, built form and operation, and how this specialist accommodation contributes to good participant outcomes. It places retail investors at risk of investing in SDA schemes which are clearly lacking and likely to fail.
The SDA Alliance is the not-for-profit peak body for SDA providers and institutional investors. It was established to lead the development of a diverse and sustainable SDA market by engaging with Government and Government entities to direct appropriate policy and practice settings. Members of the SDA Alliance include the leading SDA Providers, investors and investment funds in the country. The SDA Alliance and its members have an unparalleled understanding of the SDA market and how to deliver and operate best practice SDA.
The members of the SDA Alliance only work with wholesale investors, family offices or institutional investment funds. In our experience, there are no credible SDA Providers that will seek retail investment from retail investors.
We would discourage all retail investors from direct investment into SDA Property because of the risk of:
- engaging with unscrupulous operators who seek out and prey on ill-informed investors. Reputable funds and operators will never engage with retail investors.
- diminished returns in a low scale or single property holding. Only institutional scale investment will provide a portfolio return at approx. 10 per cent per annum.
- losing money and potentially experiencing financial hardship due to lower than anticipated returns or additional capital obligations required to maintain the SDA’s compliance with regulations.
If an investor is not eligible to invest via a wholesale fund, it may be advisable to avoid the SDA sector altogether. Or as an alternative to gaining exposure, encourage your Industry Super Fund to invest in SDA. Many superannuation funds already do.
Australian Unity was a pioneer investor in the SDA sector and our portfolio has grown to more than 200 properties across Australia. As a wellbeing company, our purpose-led approach means our SDA fund only acquires and develops high quality SDA in attractive locations to support Australians living with disability. Our goal is to create more forever homes for people living with disabilities.
Unlike some other SDA funds, we’re a proud member of the SDA Alliance and have the management expertise, provider partnerships and capability to deliver high quality SDA accommodation that participants want to live in. The result is a better quality of life and greater independence for SDA participants, sustained returns to wholesale investors and access to growth opportunities in a sector set to quadruple in size by 2030.
More information about our growing SDA portfolio
For more information about Australian Unity SDA Fund, visit our website.
Important information
Units in the Australian Unity Specialist Disability Accommodation Fund are issued by Australian Unity Funds Management Limited ABN 60 071 497 115, AFS Licence No. 234454. Information provided here is general information only and current at the time of publication. In deciding whether to acquire, hold or dispose of the product you should obtain a copy of the Information Memorandum (IM) and seek appropriate professional financial and taxation advice before making any such decision. The IM for the Fund is available at Make your wealth go further | Australian Unity Wealth or by calling our Investor Services team on 1300 997 774. Past performance is not a reliable indicator of future performance. Units in the Fund are only available to persons who are Australian resident wholesale clients within the meaning of section 761G(7) of the Corporations Act 2001 (Cth) (‘Wholesale Clients’), and this presentation is only intended for and should only be read by Australian resident Wholesale Clients.Read the full article here -Australian Unity appoints general manager of social infrastructure .
