Aware Super ramps up real estate with $7bn portfolio goal
Aware Real Estate’s recently appointed chief executive Michelle McNally.
Superannuation company Aware Super is set to launch a new real estate arm with an ambitious goal of reaching a $7bn property portfolio.
The move comes just over two months after the fund announced it had set its sights on growing its property portfolio, hiring property veteran Michelle McNally as its new chief executive.
Ms McNally said the new property arm would heavily invest in build-to-rent platforms across the country, as it had already in the US and Spain.
The fund owns about 500 build-to-rent apartments, with 1200 in its current pipeline.
Aware appears to be banking on build-to-rent apartment developments near critical infrastructure and hospitals. The move follows an essential worker housing program launched in 2018 that provided subsidised rent – usually at 80 per cent of the market rate – to those workers.
“Our focus is on sites close to important urban infrastructure like hospitals, schools and transport, to make sure essential workers can live closer to work and reduce commuting time,” Ms McNally said.
Despite the gloom forecast over the current market, Ms McNally said she was confident Aware could make strong returns for customers.
“There’s still liquidity in the market, but not at previous pricing levels,” she said.
“We expect to see good quality opportunities come to the market. It’s quite good timing for us in terms of being able to actively participate in the market.”
Aware, previously First State Super, manages $155bn in super from about 1.1 million members. The fund, started in 1992, merged with VicSuper and WA Super in 2020 around the time it changed names.
Aware reports its current property portfolio to be worth $1.7bn, with 11 assets ranging from residential to industrial, mixed-use projects and eight development sites. About 99 per cent of its current properties were leased, said Alek Misev, the fund’s senior property portfolio manager.
“We are quite ambitious with this platform, and it will become the dominant player over time,” he said.
“We are building something that will return strong returns for investors at a lower cost.
“What we’re trying to do as a super fund is to operate a very diversified portfolio of assets for members. We currently have real estate, property, infrastructure, credit, equities and bonds,” he said.
Aware deputy investment chief Damien Webb said that, with the new arm, the fund would look to further diversify its real estate holdings and deliver the strong returns.
“As part of our strategy to deliver strong returns and lower fees for our 1.1 million members, we’re aiming to increase our internally managed direct real estate portfolio from 50 per cent to as much as 80 per cent by 2025,” he said.
