UniSuper seals deal on $1bn industrial portfolio

UniSuper has defied the gloom about commercial property in the superannuation sector by snapping up a half interest in a 20-strong industrial property portfolio.

Quarry Industrial Estate in western Sydney

UniSuper has defied the gloom about commercial property in the superannuation sector by snapping up a half interest in a 20-strong industrial property portfolio across Sydney and Melbourne that is worth more than $1bn in its entirety.

The $120bn superannuation fund has pushed deeply into the industrial sector, which is now favoured by superannuation fund investors, concerned about the value of office towers and shopping malls.

The stake in the portfolio was purchased from the National Pension Service of Korea. Of the 20 assets, 12 are in the Quarry Industrial Estate in Western Sydney, and the other eight assets are in Truganina, Melbourne. Big companies such as Coles, Toll, Northline, Roche, Blackwoods, Symbion, and UPS, occupy the sites.

The deal was brokered for UniSuper by real estate firm Richmond Bridge under a mandate and Cushman & Wakefield’s Tony Iuliano and Adrian Rowse represented NPS.

UniSuper will invest alongside existing co-owners Dexus and Blackstone in the venture. Mr Iuliano said the weight of capital was heavily focused on the Asia Pacific region.

“We are seeing capital being very strategic and heavily focused on premium-grade assets as opposed to taking on long dated risk,” he said.

UniSuper senior manager property Nick Stephens said the portfolio of stabilised income producing assets complemented its existing industrial development pipeline in the strongly performing logistics sector.

The investment adds to the fund’s $7.3bn unlisted property portfolio. “As genuine long-term investors, we continue to look for unique opportunities that help our members grow their retirement savings,” he said.

Richmond Bridge’s Peter Wylie said there was fewer buyers in the market, “which allowed us to secure these high-quality assets at an attractive entry price”.

The deal, flagged by The Australian last week, sets up a run of fresh portfolio deals.

Funds house Logos has two major portfolios, which it is recapitalising and Stockland is also in the market for a capital partner on $2bn worth of projects.

The plays have been under scrutiny due to the scale of the transactions and interest rates. But local markets have held up in value due to such low vacancy industrial rates in major cities. UniSuper has been pushing further into industrial property, and earlier this year backed the purchase of a site in the Melbourne suburb of Yarraville for $105m.

Industrial portfolios have been the signature trades of recent years and the latest deal shows how big local capital is chasing exposure to the best sheds even as it shies away from other areas. Dexus set up the ­vehicle in which NPS is invested more than a decade ago and it has since grown to become one of the most successful vehicles.

The portfolio was developed out by Dexus across about 340,000sq m of high-quality logistics space.