(Bloomberg) — Australia’s largest superannuation fund has bought a stake in a portfolio of European warehouses as the country’s pensions continue to pour capital into international real estate.
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AustralianSuper has purchased a 50% stake in an €840 million ($860 million) portfolio owned by Oxford Properties, the real estate arm of the Ontario Municipal Employees Retirement System, according to a statement Monday. It is also acquiring a stake in the portfolio’s manager, M7 Real Estate, as part of the deal, it said.
European warehouses have lured the biggest pension and sovereign wealth funds from around the world as they seek long term bets that offer prospects for solid income growth. Rents have soared thanks to rising online consumption and now the recalibration of global supply chains following the pandemic and heightened geopolitical tension have added to demand.
“We believe urban logistics and distribution represents one of the most compelling sector opportunities in European real estate today, and have been tracking the sector for several years,” AustralianSuper’s head of European Real Assets Paul Clark said.
The existing portfolio includes 76 properties in western Europe spanning about 730,000 square meters (7.9 million square feet) and the venture is planning to grow it rapidly, targeting a valuation of about €4.5 billion within five years.
Oxford bought M7 Real Estate, a niche investment and asset manager that originally specialized in warehouse properties, from its founders in 2021. The business has helped many of the world’s largest private equity firms including Blackstone Inc., Starwood Capital Group LLC and Goldman Sachs Group Inc.’s asset management arm to buy up European warehouses.
The portfolio, which is about 90% leased, is located in the UK, Denmark, France, Germany, the Netherlands and Spain and M7 will seek new acquisitions for the venture in those markets. AusSuper has invested about €6 billion in European real estate, including in office and residential-led regeneration projects in London, but the deal represents its first major bet on warehouses on the continent, a sector in which it has been active in its domestic and neighboring markets.
The deal is expected to complete by the end of the first quarter, subject to regulatory approvals.
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