Australian industry superannuation fund Aware Super and Delancey Real Estate have extended their partnership by forming a UK property joint venture to invest up to £1bn (€1.2bn).
The venture will initially focus on prime Central London office properties, taking advantage of increased demand and “significant structural and regulatory change in the market and its repricing”.
The new partnership will also explore opportunities in high-quality retail, logistics and mixed-use properties that are currently undervalued.
The pair said the venture has the potential to acquire stabilised assets, fund development projects and facilitate the recapitalisation of existing capital structures.
The latest venture expands an existing partnership between Aware Super and Delancey, which includes Aware Super’s 22% ownership in Get Living, a UK build-to-rent developer founded by Delancey.
Damien Webb, Aware Super’s head of international and deputy CIO, said that, since opening Aware Super’s first international office in London in November 2023, “we have been encouraged by the growing strength of the UK economy”.
Aware Super’s investment in the latest venture will increase its total investment in the UK to over £2bn. This follows the A$175bn (€107.2bn) superannuation fund’s commitment to invest £5.25bn in the UK and continental Europe over five years, which was announced in November 2023.
Webb added: “By originating exciting deals across real estate, infrastructure and private equity we are building a balanced portfolio of resilient assets which we anticipate delivering strong returns for our 1.1m members back in Australia.”
Jamie Ritblat, founder and chairman of Delancey, said: “Expanding our relationship with Aware Super strengthens our partnership, combining the expertise and track records of both firms, with the capital and capability to execute. This underlines our status as a trusted partner for institutional investors looking to access opportunities in UK real estate.
“Amid asset repricing driven by interest-rate and regulatory changes, we see an attractive entry point in a weakened office market. Focus will start with prime central London offices to create a liquid, sustainable, and resilient portfolio, with investments in retail and logistics sectors in prime UK locations under consideration.”
Alek Misev, head of property at Aware Super, said: “A key theme of our global real estate strategy is anticipating future trends and making counter-cyclical investments. This has reaped strong rewards and we believe that under-valued Central London offices also fit this profile.”
Mathieu Elshout, senior property investment director at Aware Super, said: “With the UK property market having re-priced more quickly than others, this provides an exciting window of opportunity for the Aware Super and Delancy partnership platform to invest in quality, sustainable Central London office real estate which aims to deliver strong risk-adjusted returns to our members.”
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