The $355 billion AustralianSuper has acquired half of a $1.4 billion European industrial and logistics portfolio, as the fund continues to bolster its international real estate allocation.  

The portfolio is owned by Oxford Properties – a real estate subsidiary of Canadian pension giant Ontario Municipal Employees Retirement System (OMERS). AustralianSuper will also acquire a stake in the portfolio’s manager M7 Real Estate, which Oxford Properties bought in 2021. 

This allocation takes AustralianSuper’s global real assets portfolio to around $56 billion, of which more than $10 billion is invested in Europe, AustralianSuper said in a statement.  

“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 the fund’s head of European real assets, Paul Clark. 

Super funds have been pouring capital into European real estate as London has become an increasingly popular destination to establish international offices. The $180 billion Aware Super is betting big on the European and UK residential sector, including retirement villages and built-to-rent accommodation, and indicated its appetite to allocate in areas like cold storage, self-storage and to bargain hunt in office and retail. 

Others, such as Australian Retirement Trust, focus on the adjacent infrastructure asset class with its presence in the UK, as its chief investment officer Ian Patrick said being able to work alongside managers on the ground during due diligence is valuable. 

AustralianSuper’s current European and UK real estate investments include King’s Cross Estate and Canada Water, both urban redevelopment projects in London. The investment in Oxford Properties represents the fund’s first major foray into logistics property in the region.  

The portfolio consists of 730,000 sqm across 76 assets in UK, Denmark, France, Germany, the Netherlands and Spain. The properties are located in “last-mile” distribution hubs which are critical for ensuring fast delivery of goods to consumers in the age of rising online consumption.  

More than 200 tenants sit in the 90 per cent occupied portfolio. The assets are focused on submarkets with “acute supply-demand tension”, with a 53 per cent weighting to urban assets by estimated rental value. 

The portfolio will continue to pursue smaller, multi-tenanted, core-plus or value-add assets located near large cities and population centres, alongside a core-plus mid-box strategy seeking investments into larger distribution and warehouse assets. 

The venture is targeting a $7.5 billion valuation in three to five years. 

AustralianSuper pledged to invest £18 billion, or approximately $35 billion, in UK and Europe before 2030, according to its 2024 annual report,  

UK and developed Europe are the third-biggest region AustralianSuper has exposure to, representing 12.9 per cent of total fund allocation, behind Australia (49.5 per cent) and North America (29.8 per cent), according to the fund’s 2024 annual report. 

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