Aware super launches $7b real estate platform
Aware Super will focus on providing housing support for essential workers through a development of its build-to-rent assets as part of a move into direct property ownership that it aims to build into a $7 billion platform.
It will also look at the traditional office, retail and industrial sector, including its joint venture with Frasers Property Industrial at Mamre Road Precinct in Sydney’s west, which covers 24ha of the First Estate Industrial park with The Yards, a 77ha master-planned estate in development next door.
Aware is also investing in well mixed-use developments and the growing data and self storage industries. The global business also has joint ventures with large developers including urbanisation projects in Los Angeles and New York with Lendlease.
Aware chief executive Michelle McNally said the group would focus on the build-to-rent sector with the aim off supporting Aware Real Estate’s essential worker housing program, which offers eligible residents rent at 80 per cent of the market rate.
“Our focus is on sites close to important urban infrastructure like hospitals, schools and transports, to make sure essential workers can live closer to work and reduce commuting time,” McNally said.
“By offering discounted rents to essential workers in highly desirable buildings, we don’t increase the values attached to these sites, but attract reliable tenants who have employment stability and feel connected to the product we’re offering.”
Aware is one of the country’s largest super funds and was formerly known as First Star Super. In 2020 it merged with VicSuper and WA Super to create the new business. It has a $1.7 billion real estate portfolio and a target of $7 billion in assets under management within five years.
There are already 500 build-to-rent-style apartments in the portfolio spread across New South Wales, Victoria, Western Australia and ACT, and it has a pipeline of a further 1200 apartments. Its Illoura Place, Liverpool, Sydney site has 314 apartments, 8000 square metres of A-Grade office accommodation and ground floor retail.
Aware super senior portfolio manager Alek Misev said the strategy to invest through all cycles enabled the business to avoid the fluctuating economy with rising interest rates and inflation.
“If you look at our industrial portfolio, we started buying up land in 2014 2015, and we’re still developing that land,” Misev said. “So, we’re not really competing in what is now a very hot market.”
McNally added that with cash sitting in the sidelines from investors who want to ride out the current economic cycle “there’s potentially some good opportunity coming our way”.
“With people on the sidelines, we believe there is opportunity for us to be pretty active,” she said.
Aware Super deputy chief investment officer Damien Webb said creating what he sees as a market-leading property platform in Australia would further diversify the fund’s real estate holdings and deliver the strong returns needed to grow the retirement savings of its members.
“As part of our strategy to deliver strong returns and lower fees for our 1.1 million members, we’re aiming to increase our internally managed direct real estate portfolio from 50 per cent to as much as 80 per cent by 2025,” Webb said.
