(Bloomberg) — Australia’s third-largest pension fund, A$175 billion ($117 billion) Aware Super, is hunting among global real-estate assets as it seeks to build on strong investment results from the financial year that ends this week.
Property is an area the firm would like to add to, but there needs to be more signs of value in high quality office buildings before buying, said Damian Graham, Aware Super’s chief investment officer. His firm is using its recently opened London office as a launch pad to acquire property assets around the world.
“We are looking for distress,” Graham said in an interview in Sydney. “Obviously we’d hope to find assets that we can buy at really attractive prices, but we haven’t seen a huge dislocation of pricing into assets that we’re really interested in today.”
The nation’s fast-growing A$3.9 trillion pension pool is expected to round out the financial year on Friday with returns greater than 9%, according to an estimate by research firm Chant West. The sector’s performance will face heavy scrutiny when the regulator releases the annual performance metrics expected in August that shows how funds rate against benchmarks on returns and fees.
Aware Super has about 6% of its portfolio in property. Of that, some 20% is in office, Graham said, adding that much of the strong demand remains at the premium end. Graham expects Aware Super’s main portfolio to post a return around 10% for the financial year, he said, with one week remaining.
“There’s more transactions happening in office, so the price discovery is better, but you’re not seeing big discounts at that very high quality end,” he said. “It’s more likely to be in that sort of still good quality but not the premium end.”
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