Australian fund enters UK retail property market

One of Australia’s largest superannuation funds has entered the UK retail real estate market by taking a 50% stake in thecentre:mk in Milton Keynes.

AustralianSuper finalised the acquisition of the half share in the major regional shopping centre from Hermes Real Estate Investment Management Limited, which was acting on behalf of the BT Pension Scheme (BTPS). The investment volume for the transaction came to £270 mln (€325 mln).

AustralianSuper has over two million members and AUD$70 bn (€46 bn) of assets under management. The Milton Keynes purchase is the first direct investment of its international investment strategy which will see the fund grow its €3.3 bn property portfolio significantly over the next few years.

thecentre:mk sits in the growth corridor between Oxford and Cambridge and spans 121,000 m2 of prime retail space, putting it among the top 10 UK shopping centres in terms of retail space provision. It is anchored by John Lewis, House of Fraser and Marks and Spencer department stores alongside 220 retail units. The centre attracts over 27 million customer visits every year.

AustralianSuper was assisted in this off-market transaction by newly appointed mandate manager Henderson Global Investors. AustralianSuper and BTPS will become joint owners of the centre with Henderson Global Investors representing AustralianSuper’s interest. Hermes will remain asset manager for the property.

Jack McGougan, head of property at AustralianSuper, said: 'AustralianSuper has been monitoring the UK retail property market for quite some time and thecentre:mk is an excellent fit for our portfolio as the dominant centre in a region which is one of the fastest growing in the UK.'

Late last year AustralianSuper announced plans to commence direct investment within certain asset classes, including property, in an initiative that it said would save hundreds of millions of dollars in fees for members.