Property expectations high among industry funds

Industry super funds are reinvesting about 80 per cent of property revenue back into the asset class, according to chief executive of ISPT Super Property Daryl Browning.

The cohort of industry funds that comprised the property fund was insulating against hiccups from the major asset classes and projecting continued high performance from property, Browning said.

"That's the outlook - the earnings from property will be sustained going forward, I think at a time when other areas of the economy are under pressure," he said.

Although industry funds had started bringing investment expertise in-house, Browning said only four of ISPT's approximate 30 funds had property specialists.

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He said it made sense to increase capabilities for large holdings such as equities while continuing to outsource smaller asset allocations like property.

Industry funds were more interested in direct property than AREITs, he said, due to volatility. Funds were more focused on liquidity after the global financial crisis, according to Browning.

"Property largely works as a consequence of what the biggest asset classes do, and tends to be a bit of a shock absorber. You'll find they have a mix in their unlisted to things that can absorb that sort of shock and then try and retain ownership of their core property holdings," he said.