AusSuper repositions unlisted property after FY22–23 losses

AustralianSuper is repositioning its unlisted property assets after it lost 8 per cent in the financial year 2022–23.

In a webinar about its performance in the last financial year, Sam Weaner, investment communication manager at the fund, outlined which asset classes had performed well for the fund.

AustralianSuper is Australia’s largest super fund with $274 billion in member assets. 

Unlisted property was the worst performing asset class during the last financial year with losses of 8 per cent. 

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This compared to its best performing sector of international equities that saw returns of 19.5 per cent. The fund said this had “exceeded expectations” in a high inflation, high interest rate environment.

As a result, Weaner said the investment team is now repositioning the unlisted property portfolio.

“We saw some key things on the back end of the pandemic which really affected our returns, especially in retail property and offices hurt us with the slow return to work post the pandemic which has affected valuations and there are a lot of retail vacancies,” Weaner said.

“So we are looking to reposition the property portfolio and invest in more sectors that did well such as industrial warehouses and logistic centres.”

Earlier this month, it was announced that Amazon Australia will be opening a fulfilment centre on the AustralianSuper-owned Craigieburn Logistics Centre in Melbourne. 

Investment director, Natasha French, said: “AustralianSuper, working with our development partner Logos, has the expertise to ensure tenants can access and occupy top-quality highly specialised facilities. The Estate will have upgraded infrastructure to a minimum of 5-star Green Star rating and offers great connectivity with main arterial routes for distribution.

“This is one of the most prominent and exciting industrial and logistics estates in the country and exactly the sort of asset that appeals to AustralianSuper’s long-term outlook as an investor generating member returns.”

Other asset classes that performed poorly were private equity, which lost 2 per cent, and fixed interest that lost 1.2 per cent.

Although private equity had reported losses as a result of higher interest rates dampening valuations, Weaner said the fund still “believe[s] this is an asset class that will perform well for the fund in the long term”.

The AustralianSuper Balanced option returned 8.2 per cent during the financial year that it attributed to strong growth in global equities, performance of the technology sector, and stable economic growth.