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Aware Super dials up overseas real estate
allocation
The investor expects to shift its international exposure from 30% of its property portfolio currently
to 50% over the long term.
Christie Ou - 23 hours ago
Australia’s third-largest superannuation fund, Aware Super, will consider
growing its overseas exposure to up to 60 percent of its real estate portfolio.
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Alek Misev, head of property at Aware Super, told PERE that the pension is
“very comfortable” investing outside of Australia. “We might end up 50:50
longer term,” he said, referring to the investor’s overseas versus domestic
allocation. “We might even go to 40 percent Australia and 60 percent global
because the market [in Australia] is so small that it doesn’t really make sense to
have all your money here.”
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With a real estate AUM of A$10 billion ($6.43 billion; €5.92 billion), 70
percent of its portfolio is currently invested in Australia, 20 percent in Europe,
and 10 percent in North America.
While Misev did not disclose the exact timeline for adjusting the geographical
allocations in Aware Super’s property portfolio, he anticipated the investor
will become very “well-established” in Europe over the next few years. The
superannuation fund is in the process of setting up its London office, which is
expected to grow to 30 to 40 people in three years. With real estate one of the
key areas for Aware Super’s overseas expansion, Misev has relocated two people
from his team in Australia to London and is planning to hire another
employee locally later this year. The firm will consider building a team in the
US depending on the success of its London operation.
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Similar to its strategy in Australia, Aware Super will focus on the residential
and industrial sectors in its overseas real estate investments. The pension is
also looking at expanding into adjacent sectors such as cold storage, selfstorage and data centers in Europe. Today, the fund has three European real
estate investments, which consist of ownership stakes in UK build-to-rent
operator Get Living, Netherland’s aparthotel chain City ID aparthotel, and
Spanish residential platform Vivenio Residencial Socimi.
“Again, there’s more opportunity in Europe because the Australian market is
only about 4 percent of the global property market and is quite small. We are
also looking at those sectors here, though,” Misev said. “We feel that we can
probably get better scale over time in Europe because you can grow across
different countries.”
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Aware Super began rebalancing its real estate portfolio in 2015. Since then, the
pension fund has sold all its office and retail assets in the US and Europe.
Today, 40 percent of its A$10 billion real estate portfolio is in residential, 30
percent in industrial, 20 percent in office, and 10 percent in retail. For
comparison, in 2015, the fund had 50 percent of its A$2.5 billion real estate
portfolio in retail, 40 percent in office and 10 percent in industrial.
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