Super funds decrease property allocations

Allocations to property are one of two classes that have seen decreases in their super allocations, according to latest APRA data. 

Quarterly super data from APRA broke down how much funds were holding in different asset classes in the June quarter of 2023. 

In June 2022, super funds were holding $179.6 billion in property, divided between $61 billion in listed property and $117 billion in unlisted property.

However, by June 2023, this has fallen to $173.7 billion with $59 billion in listed property and $112 billion in unlisted property. 

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Earlier this year, AustralianSuper stated it is repositioning its unlisted property assets after the allocation lost 8 per cent in the financial year 2022–23, its worst performing asset class. 

“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,” Sam Weaner, investment communication manager, 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.”

On the other hand, assets invested in infrastructure had risen significantly from $160 billion to $191 billion, a rise of 19 per cent.

This is divided between $34 billion in listed infrastructure, $86 billion in Australian unlisted infrastructure, and $70 billion in international unlisted infrastructure. 

This brings the total assets invested in unlisted property and infrastructure assets from $244 billion to $268 billion. There is a further $113 billion invested in unlisted equities, up from $109 billion in June 2022.

The only other asset class that reported a decline in asset volumes across total super funds was commodities that fell from $2.5 billion to $2.3 billion, now representing less than 1 percentage of the funds’ allocations.

Looking specifically at industry funds, property allocations fell from $93 billion to $90 billion while infrastructure assets rose from $113 billion to $131 billion. Listed property held $20 billion and unlisted property held $68 billion, both down from their June 2022 weightings. 

Infrastructure assets in industry funds were divided between $16 billion in listed infrastructure, $63 billion in Australian unlisted infrastructure, and $51 billion in international unlisted infrastructure.

On retail funds, property allocations were largely unchanged at $42.3 billion compared to $42.2 billion while infrastructure allocations grew from $19 billion to $25 billion.