Industry super fund Hostplus has 'voracious' appetite for property
Hospitality industry superfund Hostplus is looking to bulk up on hotels and office towers after booking more than $1 billion in member contributions in the first four months of the year.
Speaking at a recent hotel conference, Hostplus head of investment strategy Greg Clerk said the super fund was a “voracious chaser of assets”.
“We have actually pulled in a billion dollars in the first four months of the year, so we need to find a home for that. We are focused on unlisted assets in the infrastructure space, the property space as well as private equity and credit,’ he said.
In the property space, Mr Clerk said Hostplus was happy to be a passive owner. “We really just want to own bricks and mortar for a long period of time,” he told the AHICE conference.
He added that with $25 billion of funds under management and growing at 10-15 per cent year, its appetite was for bigger deals and for global deals.
He revealed Hostplus recently came close to acquiring a “big hotel globally which did not get over the line” and had also been offered the opportunity to acquire the new Sofitel Hotel at Darling Harbour (bought by hotel investor Jerry Schwartz).
Unlisted assets make up 40 per cent of the Hostplus portfolio.
Bedrock of portfolio
Its property investments include a stake in the $2 billion International Convention Centre at Darling Harbour and ownership of an $800 million portfolio of Woolworths-backed pubs as part of a wholesale investment partnership with listed fund manager Charter Hall.
“We’re looking at both – offices and hotels – but the truth is we want to be in every [property] sector,” Mr Clerk said.
‘If someone came to us with something like an office building in Barangaroo on a cap rate of 8 per cent, I would go yes, I will take that in a heartbeat.
“The real comfort for us is a yield we can look through for the next 10 to 15 years. That is the bedrock of our portfolio.”
When it came to hotels, Mr Clerk said an attractive investment might have different attributes like “monopolistic tendencies”.
“What you’re seeing with hotel values is pretty much happening with every unlisted asset in the world,” he said.
He added that with the interest rates low globally, the “world was waking up to unlisted assets” as an alternative to listed property.
“We want to find assets that are earners and will be so for a very long period of time. That’s our focus.”
