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Australia’s largest pension fund enters European property lending

AustralianSuper has teamed up with TH Real Estate in a £280m London development financing.

AustralianSuper, the largest of Australia’s ‘super’ funds with $A140 billion (€86 billion) under management, has entered the European commercial real estate lending market, with a £280 million (€314 million) UK development facility and a longer-term debt mandate.

Alongside TH Real Estate – which has been the pension fund’s longstanding advisor – AustralianSuper has financed the construction of One Crown Place, for Malaysia-based MTD Group.

In addition, the Australian firm has appointed TH Real Estate on a European debt advisory mandate, through which it intends to expand its investment strategy into UK and European commercial real estate debt. This follows the direct European office and retail sector equity mandate agreed between the two parties at the beginning of 2018.

The pension fund will target debt financing opportunities in London and other major European cities with a focus on both mezzanine and development/refurbishment opportunities for investments of more than £100 million.

The 370,500-square-foot Crown Place in the City of London, will comprise 136,000 square feet of offices, 7,000 square feet of retail, a 41-bed boutique hotel and 246 luxury residential units. CBRE is acting as development manager for the scheme’s Malaysian backers.

AustralianSuper has committed £230 million, with TH Real Estate’s recently launched Global Real Estate Debt Partners – Fund II (UK) providing £50 million. CBRE Capital Advisors debt and structured finance team, led by Steve Williamson, arranged and structured the transaction for MTD Group.

“The One Crown Place transaction strongly aligns with our real estate debt strategy to target high-quality opportunities secured against institutional assets in top-tier locations in European cities,” commented Jason Peasley, head of mid-risk assets at AustralianSuper.

“Expanding our relationship with TH Real Estate – which has an impressive track record in the European debt sector – allows us to partner with a market-leading global manager to access high-quality real estate opportunities,” he added.

AustralianSuper manages more than $A2.4 billion in its direct credit portfolio together with more than $A10 billion in its property equity portfolio.