Started in 2013, Ethical Property Australia (EP) provides co-located work spaces for socially and ethically driven enterprises, and delivers a social, environmental and financial return to investors. EP is a joint venture between the UK-based Ethical Property Company and Australia’s Donkey Wheel Trust, and EP’s first property under management was Donkey Wheel House in Melbourne. In 2015 EP led the creation of the Ethical Property Commercial Fund, which now owns Donkey Wheel House and Endeavour House in Canberra, and which is continuing to grow its portfolio. The physical spaces provided by EP for work, meeting, event, and retail purposes foster a sense of community among social enterprises and not-for-profits where users of the space are in the presence of likeminded organisations, and EP actively curates the community and reports the beneficial impacts experienced by organisations in Ethical Property centres.
Ethical Property Australia
Ethical Property creates the spaces social impact organisations need to make a difference. They bring together organisations wanting to co-locate; raise impact investment to purchase and refurbish properties; carry out the pre-purchase due diligence and any capital works required; and then provide asset management and property management services. They also work closely with the tenant organisations to maximize the benefits of co- location and to ensure that tenants are getting added value from being located in an Ethical Property centre.
Family, Communities & Inclusion and Employment, Training & Participation
Ethical Property Australia commenced its trading in November 2013 under the leadership of the UK Ethical Property Company’s former Property Director, Peter Allen. The Ethical Property Commercial Fund was established in December 2015.
Ethical Property Australia
Equity and Debt
$19,100,000 equity (units in a unit trust, the Ethical Property Commercial Fund) and $7,000,000 debt (secured against properties owned by the Fund)
Equity: Donkey Wheel Ltd as trustee for The Donkey Wheel Charitable Trust
Another private foundation (requested privacy)
A grant of $100,000 was provided from the Impact Investment Ready Growth Grant
The Difference Incubator (TDi). TDi develops investment-ready enterprises that create positive social impact and are financially sustainable – freeing them from ongoing reliance on philanthropic or government funding. Ethical Property Australia used the grant to work with TDi over a long period to develop the business model for the Australian context, and create the best structure to receive investment. That led to the creation of the Ethical Property Commercial Fund which now stands at $26.1m.
The idea for Ethical Property Australia came about as Peter Allen decided to re-locate to Australia and in exploring the potential for exporting the Ethical Property model to Australia, met Paul Steele, CEO of Donkey Wheel Trust.
Ethical Property Australia contributes to Australia’s social impact sector by removing barriers between socially-driven enterprises and their access to physical properties for work, meeting, and event purposes. By providing organisations with affordable property solutions and the benefits of co-location with similar groups, Ethical Property Australia helps its tenants to better meet their strategic objectives and have a greater impact in society. Further, Ethical Property Australia ensures that their properties are refurbished and managed in the interest of a sustainable environment. With current focus on expansion in the fringe of Sydney CBD, further property ownership also provides existing tenants of Ethical Property Australia properties to collaborate through networks of similar organisations across Australia.
The Fund is less than 12 months old and has not yet published an average return, however is targeting a ten year internal rate of return (IRR) of 8-10%, with quarterly cash distributions.
The rent paid by tenants creates the financial return to unit holders in the Fund.
Ethical Property Australia and the Ethical Property Commercial Fund are currently developing plans for a centre in Sydney, with over ten social impact organisations interested in co-locating. They also plan to grow the Melbourne and Canberra clusters and will be embarking on a capital raise in the next few months.