AustralianSuper acquires stake in $605m Boston tower

AustralianSuper has made its second US property investment in less than two months, with the acquisition of a part stake in a Boston office tower.  

The Australian superannuation fund, AustralianSuper, has formed a joint venture partnership with Brookfield Property Partners to acquire a 49 percent stake in an office property in Boston, in a deal which is understood to have valued the property at $605 million.

The country’s largest superannuation fund has bought the stake in 75 State Street, a 31-storey office tower spread over 841,000 square feet in the financial district of Boston. Brookfield will own the remaining interest and also retain management and leasing responsibilities, the firm said in a statement announcing the deal.

Ric Clark, chief executive officer of Brookfield Property Group, said that there continues to be healthy demand from investment partners in core, stabilized office property in gateway markets, and the decision to bring Australian Super into this property was taken as part of the firm’s ongoing capital recycling initiative.
AustralianSuper did not immediately respond to email questions on the amount invested in this deal.

“AustralianSuper looks forward to a strong partnership with Brookfield Property Partners who we consider to be one of the premier office asset managers globally,” Jack McGougan, head of property at AustralianSuper said in a statement. “We were attracted to 75 State Street as a result of its strong tenancy profile and prime location in one of the leading cities in the United States.”

The investor has been on an overseas acquisitions spree, led by plans to have 10 percent of its total assets allocated to real estate over the next three to four years. According to The Australian, AustralianSuper plans to invest as much as $4 billion in international real estate deals.

This deal was preceded by another landmark property investment in March this year, when AustralianSuper acquired a 25 percent stake in the Ala Moana Center in Honolulu, Hawaii from the real estate investment trust General Growth Properties. The investor is understood to have invested nearly A$1.1 billion (€774.65 million; $870.3 million) in equity for the deal, along with the assumption of A$650 million in debt, making it the firm’s largest single direct real estate investment to date. The deal was made via a mandate it gave to QIC, the Australia-based investment manager, in late 2013 to execute investments in prime retail properties in the US.

Following the Ala Moana deal, AustralianSuper has more than A$7 billion in real estate assets.