AustralianSuper to target offices and shopping centres in quest for $9 billion property portfolio

Industry super fund AustralianSuper says it is on the “cusp” of rolling out its strategy to double its property investment portfolio to $9 billion over the next four years following the appointment of  a research manager and an investment manager.

Plans to double its property investment holdings were announced by fund chairwoman Elana Rubin in March this year.

The super fund, one of the largest in Australia with $46 billion in funds under management, has also indicated that it will target acquiring offices and shopping centres.

Its strategy is part of a growing trend for large industry super funds to increase their exposure to direct commercial property investments as a way to diversify their portfolios and offer more choice to their members – and to counter the loss of members who are setting up self-managed super funds, which can acquire property in their own right.

However, unlike another industry super fund Cbus, which is considering allowing its members to invest directly in property owned and managed by its property subsidiary, AustralianSuper will not get involved in developing new projects.

As part of its rollout of the new strategy, the super fund’s head of property, Jack McGougan, is currently in the process of appointing a research manager and senior investment manager to build and manage new local and international relationships reported the Australian Financial Review.

Their roles will be to ensure that portfolio management decisions are increasingly made in-house while property and asset management will remain mainly out-sourced – the Queensland government’s QIC and unlisted property fund manager ISPT will continue to manage the majority of AustralianSuper's property assets.

The fund will focus on acquiring office and retail assets with a “slight bias” towards super-regional shopping and shopping centres in the CBD.

Yesterday’s acquisition by Blackstone of the Top Ryde City shopping centre for $341 million would likely be the type of asset sought by the fund.

In the office space, the fund will target premium and A-grade buildings in the capital cities.

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