One of Australia’s largest unlisted commercial property funds, ISPT Core Fund, has received a request from industry super fund, Hostplus, to withdraw A$1.4bn (€816.9m) to boost liquidity.
An industry source told IPE Real Assets the Hostplus request went to the fund’s manager, ISPT, (which is owned by industry super funds, including Hostplus) last week.
Along with all super funds in Australia, Hostplus is facing an avalanche of requests from its younger members for early release of super. Industry-wide requests are estimated to reach A$27bn as financial hardship bites during the COVID-19 health crisis.
Hostplus has said publicly that it has cash holdings of A$6bn. It also has around 1.2m members, many of whom work in the hospitality and tourism sectors, which have been hardest hit during the current business shutdown.
“Investors sell units when they have to rebalance their portfolio or need liquidity,” a source told IPE Real Assets. “So this request in itself is not news.”
But he did concede: “What is unusual is the large sum of redemption involved.”
Others investors speculated that, with a wide client base of around 40 investors and its size, the opportunity of another ISPT investor picking up the Hostplus secondary units was better than in a smaller fund with a small group of investors.
The ISPT portfolio – which includes some of Australia’s best office buildings and logistics and industrial assets – was valued at A$15.7bn at the end of the first quarter of this year.
Another person familiar with the Hostplus request said given current market conditions, it seemed likely that Hostplus would have to accept a discount to its investment.
Hostplus itself this month devalued assets within its property and infrastructure portfolios by 7.5%-10%.