Australia’s megafunds are looking to international asset owners for ideas on how to invest what will soon be trillions in retirement savings. But banks – with their sharp focus on efficient implementation and balance sheet management – could also be a source of inspiration.
With two years of double-digit super returns under its belt, Colonial First State’s investment team is taking a hard look at markets and moving money to areas where they think they’ll make more of it.
AustralianSuper makes European industrial property play
Australia’s largest super fund has acquired a 50 per cent stake in Oxford Properties’ A$1.4 billion European industrial and logistics portfolio with the aim of growing it to A$7.5 billion over the next three to five years and building a “significant industrial and logistics venture” across the continent.
AustralianSuper has also acquired a 50 per cent stake in the portfolio’s manager, M7 Real Estate, which was acquired by Oxford in 2021.
“We believe urban logistics and distribution represents one the most compelling sector opportunities in European real estate today, and have been tracking the sector for several years to find the right portfolio that meets our ambitions, with strong fundamentals and significant growth potential,” said Paul Clark, AustralianSuper’s head of European real assets.
“We are delighted to partner with the Oxford and M7 teams, investors with proven track records operating and growing high-quality logistics portfolios, to scale the ESCIP platform together using our collective expertise, generating long-term performance for members.”
AustralianSuper has previously been underweight industrial property, with CIO Mark Delaney bemoaning the portfolio as “the worst of all worlds” due to its heavy allocation to retail and Australian assets in 2023. The new portfolio comprises 76 assets located in 19 of “the most strategic urban last mile and distribution hubs” in the UK, Denmark, France, Germany, the Netherlands and Spain. The portfolio is 90 per cent occupied and delivers a highly diversified and defensive income stream, AustralianSuper said.
AustralianSuper’s global real assets portfolio totals A$56 billion, with $10 billion of that invested across Europe. Its assets include the King’s Cross Estate and Canada Water regeneration projects in London, while its exposure to industrials covers Moorebank Logistics Park, the Craigieburn Logistics Estate and the Wiri Logistics Estate in New Zealand.
