Australia's second-largest industry super fund, the $50 billion QSuper, is on the hunt for more offshore property after an acquisition “splurge” over the past three years that has included it purchasing a stake in One Times Square in New York and a slice of Heathrow Airport in London.
While Australia’s largest industry super fund, AussieSuper, is yet to fulfil its separate $1bn US and British real estate mandate, QSuper has quietly snapped up a raft of properties and stakes in infrastructure assets in America and Europe while also building its Australian property and infrastructure business.
QSuper chief investment officer Brad Holzberger confirmed that the group would continue to look for property and infrastructure beyond Australia.
“We are growing at a pace where we have outgrown Australia,” Mr Holzberger told The Australian.
Mr Holzberger said another reason the fund has invested in property outside of Australia was the competitive bidding on local real estate and the lack of distressed sellers compared to other parts of the globe.
In America, QSuper owns just under $500 million in real estate, including its stake in One Times Square and the majority share of the 1000 Main office tower in Houston, Texas that it purchased through a partnership with Invesco for $340m in 2012.
QSuper’s Australian property holdings — a whopping $2.1bn — are mostly managed by QIC and include Robina Town Centre on the Gold Coast, Westpoint mall in Blacktown, in Sydney’s west, and the huge Logan Hyperdome, south of Brisbane.
QIC also manages QSuper’s 25 per cent stake in Westfield Merry Hill shopping centre outside the city of Birmingham in England that is valued at $261m, and last year it snapped up office building Exchequer Court in London for $151m.
Other investment managers buy real estate and infrastructure assets for the company in Britain, Europe, America and Asia.
For infrastructure, along with its holding in Heathrow, QSuper owns stakes in Edinburgh Airport and Thames Water.
QSuper, which is the trading name for Queensland’s State Public Sector Superannuation Scheme, also owns $1.4bn of property in the US and Europe that is managed by other asset managers including Jamestown Premier, Invesco and AEW Europe.
“We’ve had a very significant acquisition program over the past three to five years,” Mr Holzberger said, adding that the pace of acquisitions would slow in coming years.
“Having had a bit of a splurge we’re being a bit more selective.”
But he added that with the fund continuing to grow it would need to look offshore for property and infrastructure assets.
“We also have a lot of lower profile assets that you wouldn’t be caught dead at ... We’re building sheds on the windswept plains of Poland,” Mr Holzberger said.
QSuper also has about $30m invested in Japan, Korea and Singapore through unlisted funds that are in wind-up mode, QSuper head of funds management Charles Woodhouse said.
Mr Woodhouse added that many of its other direct property investments were held through wholesale funds.
“Retail dominates if you look across the fund’s assets,” Mr Woodhouse said.
“That’s a function of the deals that have been presented to us.”