Interview with Paul Clark from AustralianSuper

Q. How has AustralianSuper’s appetite for the real estate sector evolved in the last 12 months? 

We’re more cautious and conscious of the mismatch between valuations and prices.

We continue to focus on achieving stable long-term income by finding attractively priced investments benefiting from the structural changes driving demographics, digitisation and placemaking, underpinned by limited land supply, restrictive planning and deep pools of talent.

Q. Which sectors does AustralianSuper favour and why?

We believe in the future of cities and look for pockets of genuine underlying value growth, particularly: major mixed-use, city-centre development and investment; pan-European logistics and industrial; and the living sector. In all cases we’re focused on opportunities with the right location, scale, commitment to quality and sustainability.

We believe that investing in large-scale, high-quality assets benefiting from underlying structural drivers will deliver superior returns for members over the long term.

Q. Which world cities does AustralianSuper favour and why?

Not every city in the world can offer the kind of large-scale investment opportunities we’re seeking. We have invested in London and are examining cities like Berlin, but the exacting nature of our criteria focuses the locations where we believe the best opportunities lie.

Q. What returns does AustralianSuper anticipate making from real estate over the next year and the next five years?

Our investment horizons go beyond five years. Essentially, over the life of an investment we’re aiming to deliver income and capital appreciation to the fund’s members.

Q. What is AustralianSuper’s approach to ESG?

We have a strong focus on asset decarbonisation, underpinning long-term scale investments as regulations tighten, encouraging industry change. ESG sits at the heart of the fund’s investment assessment processes, and it is an engaged owner.

Q. What do you see as the biggest opportunities and concerns over the next year?

Repayments, refinancing and repricing are presenting significant challenges across the market – not least to lenders – and will continue to do so. 

In this environment there will undoubtedly be attractive opportunities for well-capitalised investors, like AustralianSuper.

The one issue that will impact us all is climate change and in particular the net zero carbon agenda – it’s a central tenet of our investment and portfolio management processes.

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