Alternatives Outlook 2024 Report

SPECIALIST DISABILITY ACCOMMODATION

Specialist Disability Accommodation (SDA) is a rapidly evolving alternative sector, straddling the realms of social infrastructure and living sector mandates. The SDA sector has continued to experience significant inquiry with investors attracted to the sector’s strong yield profile and government supported income stream. Furthermore, the sector has benefited from social impact investing mandates and Australia’s Authority (NDIA) maintain the SDA scheme as key priority area in policy evolution. Although the value proposition for the niche sector remains strong, challenges around market data transparency and uncertainties in projecting supply current housing undersupply thematic which has seen the National Disability Insurance

demand balance on a local basis has resulted in some caution across investors assessing current opportunities. However, capital raising is expected to re-gain momentum both as broader macroeconomic fundamentals improve and as fund managers continue to solidify their track record in the still relatively new sector. Over 2023 direct transactions were limited given the smaller scale of the sector and limited operational asset acquisition opportunities. The limited evidence in the market continues to suggest a significant yield spread between SDA assets and both core living and healthcare assets. Sector size estimate: AUD 4 billion Freehold Yields: 7.25-9.00% Going Concern Yields: 8.50-10.00%

KEY TRANSACTIONS

Size AUD

Type

Name

Yield

Buyer/Investor

Date

Three Asset Acquisition

Barwon Investment Partners

Direct

31.25m -

Aug-23

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CUSHMAN & WAKEFIELD

CUSHMAN & WAKEFIELD