Dutch pension fund eyes up Australian property investment

The Dutch Pension Fund for the Construction Industry reportedly believes Australia offers some of the best opportunities in Asia, as it gets set to boost its international real estate portfolio.

Most of the pension fund’s €5.3 billion property assets are concentrated on direct investments in its domestic market, but about 20% is dedicated to international markets.

The fund wants to double its global portfolio, which currently stands at €1.3 billion, by 2014, according to a Citywire Global report.

"Right now we are increasing our international portfolio in Europe, but we are also looking at the US and Asia-Pacific," says Stephen Tross, Bouwinvest’s director of international investment. Bouwinvest is the property manager for the Dutch Pension Fund for the Construction Industry.

"In the Asia-Pacific region we have already invested in a number of funds and we expect to make our first investment in the retail and office sectors in Australia.

"The country has good fundamentals, it is a market where the population is still growing and the economic prospects look good.

"The economy is holding up well and you can also see it is profiting from its rich base of resources and the Chinese growth story.’

Despite the pension fund’s Asia expansion plans, Tross says the fund was run using a defensive risk profile.

"In our expansion we are looking more towards Australia as it is a mature market, as well as Japan. It is more the developed Asia than the developing one we are keen to invest in."

Tross told Citywire that the majority of the pension fund’s international exposure was gained via unlisted real estate funds as they often offered better options than listed real estate funds.

"The benefit of unlisted funds is that we have more influence as we are big investors and often hold advisory board seats.

"Also these investments are not directly influenced by stock market sentiment."

The management of the real estate assets, which account for 18% of the fund’s €29 billion, was spun off from the broader fund into a separate company, Bouwinvest, in 2003.The fund’s current international exposure is focused on Europe and the US, which make up 64% and 31% respectively.

Tross joined the board of managing directors in September 2010 and previously worked as director for KPMG. Before KPMG he filled several functions for PwC.