AustralianSuper, Australia’s largest pension fund, has acquired a 50% stake in a €840 million European warehouse portfolio owned by Oxford Properties, the real estate arm of the Ontario Municipal Employees Retirement System (OMERS). This strategic investment highlights the growing interest of Australian pension funds in international real estate, particularly within the thriving European logistics sector.
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The portfolio comprises 76 properties strategically located across key Western European markets, including the UK, France, Germany, the Netherlands, Spain, and Denmark. Totaling approximately 730,000 square meters (7.9 million square feet), the portfolio boasts a 90% occupancy rate, demonstrating strong demand for warehouse space in these regions. As part of the transaction, AustralianSuper also secured a stake in the portfolio’s manager, M7 Real Estate, a specialized investment and asset management firm with extensive experience in the European warehouse sector. This partnership will leverage M7’s expertise to actively manage and expand the portfolio, aiming for a €4.5 billion valuation within five years.
European Warehouse Market Attracts Global Investors
The European warehouse market has become increasingly attractive to global institutional investors, driven by several key factors. The rise of e-commerce has fueled demand for logistics space, pushing rental rates higher. Furthermore, disruptions to global supply chains caused by the pandemic and geopolitical tensions have prompted companies to reconfigure their logistics networks, prioritizing resilience and efficiency. This trend has further strengthened the demand for strategically located warehouse facilities in Europe. AustralianSuper’s investment in the European warehouse market aligns with its long-term investment strategy focused on sectors with strong income growth potential.
AustralianSuper’s European Real Estate Expansion
Paul Clark, AustralianSuper’s Head of European Real Assets, emphasized the compelling investment opportunity presented by the urban logistics and distribution sector in Europe. This acquisition marks AustralianSuper’s first major foray into the European warehouse market, complementing its existing €6 billion European real estate portfolio, which includes office and residential projects in London. This strategic move signifies the fund’s commitment to diversifying its investments geographically and across asset classes.
Transaction Details and Future Outlook
The transaction, valued at €420 million ($430 Million USD) for AustralianSuper’s 50% stake, is expected to close in the first quarter of 2025, pending regulatory approvals. Eastdil Secured LLC advised Oxford Properties on the deal, while Savills Capital Advisors represented AustralianSuper. This significant investment underscores the confidence of institutional investors in the long-term growth prospects of the European warehouse market and positions AustralianSuper for continued expansion in this dynamic sector. The joint venture between AustralianSuper and Oxford Properties, through M7 Real Estate, anticipates acquiring further properties in the existing markets to achieve its ambitious growth targets.
This transaction reflects a broader trend of Australian superannuation funds seeking global diversification and stable income streams in a challenging investment environment. The European warehouse sector’s robust fundamentals and long-term growth potential make it a compelling investment destination for these large institutional investors.
