Aussie super fund to ramp up UK investment

One of Australia’s largest superannuation funds is gearing up for more investment in the UK, targeting areas including self-storage and data centres, as well as the growing living sectors. Aware Super, which manages A$150bn (£78bn), has chosen London as its first international office, leasing space at the Crown Estate’s Charles House at 5-11 Regent Street, SW1. The fund expects to house a team of up to 40 staff in the capital, including employees who move from Australia. “We have been in Australia for all these years, and increasingly we’re looking to diversify our investments outside,” said Sydney-based Anjana Moran, portfolio manager of property investments, highlighting the fund’s investment earlier this year in UK build-to-rent developer Get Living. Working on the ground So far, the fund has acquired businesses remotely, but “fly in, fly out just isn’t the most efficient”, Moran said. On a recent trip to London, she told EG the ability to have people working on the ground will bolster the acquisition strategy and make it easier to work with the management teams of investee companies. “The London office will benefit us in terms of originating new deals and then the ongoing governance of the existing assets – Get Living is a great example,” Moran said. Aware Super bought the 22% stake in Get Living from founding shareholder Qatari Diar, giving it a chunk of the 2,400-home masterplan for the former Olympic village in Stratford, east London. Get Living chief executive Rick de Blaby told EG that with Aware Super’s backing, the company is now looking to acquire in Birmingham and Manchester. He added that expanding to the regions and growing the footprint in both cities will give Get Living “operational synergy and efficiency”. Moran said Aware Super is “very supportive of that strategy”, adding: “That [regional expansion] was always part of the case when we undertook our investment due diligence in Get Living. It meets a lot of important objectives for us and delivers strong risk-adjusted returns for members. “As a fund, we have strong conviction in the living sectors. Living is our biggest exposure in the portfolio, as we’re very long-term investors.” She added that Aware Super’s investment horizon allows it to look past short-term market volatility at longer-term trends. “BTR is a long-term asset class that we think is going to be sticking around, particularly as you’ve got higher interest rates – people are locked out of the housing ownership market,” she said. “The BTR market is going to increase in dominance and popularity. We are also one of the biggest investors in BTR in Australia, and it’s a much more nascent sector than in the UK. We are also seeing the opportunity to invest in Get Living, see the best practice and then take the learnings back home as well.” Pan-European portfolio Now the fund wants to buy more equity stakes in UK and European companies. As well as alternative sectors such as data centres and self-storage, Aware Super is eyeing other parts of the European residential markets. The Australian fund does not yet have purpose-built student accommodation in its portfolio, other than through Get Living’s portfolio, but does have equity in City ID, a serviced aparthotel company in the Netherlands. The developer has three operational assets in Amsterdam, as well as three development sites across London, Dublin and Lisbon. Its London site will open in 18 months. “The idea with that platform is to take the base that they’ve got as operators and to create a pan-European portfolio,” said Moran. Aware Super also has an equity stake in Spanish BTR operator Vivenio, as well as assets in senior living, “another really strong demographic trend”. Moran sees opportunity for Aware Super in “the ageing population increase, the increasing wealth in that specific age cohort, and what they are looking for in their post-retirement living needs”. To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @AkankshaEG or @EGPropertyNews Photo © Aware Super