Australian pension fund Aware Super has joined forces with UK property firm Delancey Real Estate to create a new real estate investment platform in the UK.
The partnership aims to invest up to £1 bn (€1.2 bn) initially in UK properties, targeting attractive risk-adjusted returns for Aware Super's 1.1 million members.
The platform will initially focus on prime Central London office properties, capitalizing on strong investor and occupier demand for high-quality assets. This sector is undergoing significant structural and regulatory changes, presenting attractive investment opportunities.
In addition to Central London offices, the platform is open to exploring investments in other UK real estate sectors, such as retail, logistics, and mixed-use properties. These sectors offer potential for cyclical returns, driven by undervalued assets and market recovery.
Jamie Ritblat, founder and chairman of Delancey, commented: ‘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.’
Aware Super head of Property Alek Misev, 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.’
Aware Super senior investment director Property, Mathieu Elshout, added: ‘There is a sharp supply to demand imbalance in the London office market which is creating an unprecedented flight to quality for high quality office space in the best locations and with compelling sustainability credentials. 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.’
Sustainability will be a key focus of the Aware Super-Delancey partnership. The platform's decarbonization agenda will be integrated throughout the investment lifecycle, from acquisition to management and divestment.
The flexible platform can invest in stabilized assets, fund development projects, or assist with recapitalizations. It is open to acquiring single assets, portfolios, or even entire companies.
Aware Super already has a significant presence in the UK real estate market through its 22% stake in built-to-rent developer Get Living, founded by Delancey.
In addition to partnering with Delancey, Aware Super will continue to seek out other direct investment opportunities as it expands its European real estate portfolio.
Aware Super's allocation to the new UK real estate platform will bring its total investment in the UK to over £2 bn (€2.4 bn). This follows the fund's commitment to invest £5.25 bn (€6.29 bn) in the UK and continental Europe over five years, announced after opening a London office in November 2023.
