AustralianSuper to double commercial property investments as part of diversification play

Industry super fund AustralianSuper plans to more than double its investments in commercial property over the next five years, according to chairwoman Elana Rubin.

According to its most recent annual results to June 30, Australia’s biggest industry super fund has $4.54 billion invested in direct property through unlisted property trusts up from $4.17 billion in the previous financial year.

In speech to the Israel Australia Chamber of Commerce luncheon reported by the Australian Financial Review, Rubin said the super fund would look to invest in large, top-end shopping centres and also build on its portfolio of CBD offices and other commercial assets.

Rubin expects there to be greater competition from other super funds and institutional investors for premium commercial properties as well as a move to invest directly in assets rather than as passive investors in “pooled vehicles”.

She also expects AustralianSuper to increase its exposure to overseas commercial property assets from just 3% of its portfolio to 20% as competition heats up for local commercial core properties.

In its annual report, AustralianSuper says super members have the option to invest directly in a “range of Australian and international properties, including office buildings, shopping centres, hotels, resorts, factories and warehouses”.

“It’s designed for members seeking strong medium to long-term capital growth and lower volatility than shares”.

The annual report says AustralianSuper’s investments in infrastructure and direct property “continue to provide diversification benefits and to sustain strong long-term returns”.

“Our diversified strategy helped to reduce the impact of poorly performing share markets.”

More than half of AustralianSuper’s property investments are in the ISPT Core Fund, which holds 78 office, industrial and retail assets, including 500 Bourke Street in Melbourne, 363 George Street in Sydney and Central Plaza One on Queen Street in Brisbane.

AustralianSuper has $46 billion under management and 1.9 million members.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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