The biggest supporters of Australian real estate? Super fund | Asset owners

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Australian pension funds invested aggressively in domestic properties, accounting for 40% of the capital paid into the Australian real estate sector in the first half of the year.

During that time, super funds allocated AU $ 11.9 billion ($ 8.6 billion) to the Australian real estate sector, according to data from the Australian Prudential Regulation Authority (APRA) released on August 25.

During the same period, global investors allocated A $ 29.6 billion to Australian real estate, according to RCA, compared to A $ 23.1 billion during the same period in 2020.

Troy Rieck, CIO of LGIAsuper, said AsianInvestor the fund’s search for yield has prompted it to increase its allocations to real estate development projects. “Real estate development activities are likely to represent a larger share of returns in the future,” he said.

Growing investor interest in Australia has enabled Aware Super to accelerate the pace at which it has been able to sell managed fund holdings and redeploy into direct investing, according to Alek Misev, real estate portfolio manager at Aware Super in Sydney .

“Liquidity returned faster [than expected] locally, ”he said, adding that over the past year the fund has sold retail and office assets and allocated them to industrial, multi-family and retirees.

Australia performs well on Aware Super’s three main investment themes: aging populations, younger generations and technology, guiding its allocation over the next five years.

BETTER AND BETTER

Charter Hall, Australia’s second-largest property manager, reported net inflows of A $ 5.3 billion in the first half of the year, in its year-end results released on 23 August. Institutional investors accounted for A $ 3.5 billion of the total, including $ 500 million from Australian pension funds and $ 1 billion from global pension funds, and the rest from sovereign wealth funds, insurance companies and d ‘other institutions.

According to data firm Realfin, Charter Hall had raised $ 9.8 billion in the past five years, the sixth-highest number of property managers in the world.

Two billion dollars of the 5.3 billion Australian dollars of entry to Charter Hall during the year up to June went to the Charter Hall Prime Industrial Fund (CPIF), which now has 10 billion Australian dollars assets under management (AUM).

Russell Proutt, Chief Financial Officer of Charter Hall, said AsianInvestor that Singapore and Japan were two major sources of Asian flows to its flagship logistics funds, followed by South Korea, with flows also coming from Thailand and Malaysia.

Proutt said about A $ 3 billion of the A $ 10 billion fund was either earmarked or committed to developing logistics assets.

GLOBAL CALL

Besides Australian pension funds, other investors are also increasing their allocations to Australian real estate. For example, Allianz Real Estate in Germany currently has 1.3 billion euros ($ 1.5 billion) invested in Australia, a figure that is expected to increase.

“We continue to seek office opportunities in 24/7 cities such as Sydney and Melbourne; logistics opportunities on the east coast; and specially designed student accommodation (PBSA) opportunities in the four main cities. The institutionalization of Australia’s multifamily sector is gaining momentum and we are in the initial assessment phase, ”said Rushabh Desai, CEO of the Asia-Pacific business of Allianz Real Estate. The opening of the company’s Australian office was delayed by Covid last year, and a revised date has yet to be announced.

The company’s investments include the June 2020 joint venture with Charter Hall, which led to the acquisition of the Australian logistics portfolio of the ALDI supermarket group for A $ 648 million.

Meanwhile, Joseph Lee, co-managing director and chairman of Seoul-based real estate specialist Igis Asset Management, said the fund was increasing its allocation to the office sector in Australia through a fund of funds, while reviewing its first logistics investments in the country.

“Australia has been a strong defensive market during Covid, it has good fundamentals and the market has already started to recover,” he said. AsianInvestor.

Louise Kavanagh, Managing Director and CIO Asia-Pacific of Australian company Nuveen Real Estate, said AsianInvestor that the fund continued to favor well-located Class A offices in Sydney, where supply is limited and demand from technology and emerging sectors is strong.

“A procyclical government policy [in the form of] wage support, containment of Covid-19 and rapid economic recovery, especially in the labor market, have helped cement the interests of institutional investments [and] pushing prices up, ”she said.


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