AustralianSuper, Australia’s largest superannuation fund, has invested nearly A$1.1 billion (€720 million; $760 million) in equity, along with the assumption of A$650 million in debt, in a US property deal. AustralianSuper has purchased a 25 percent stake in the Ala Moana Center in Honolulu, Hawaii from real estate investment trust General Growth Properties (GGP), which will retain the remaining interest in the property. The transaction, which values Ala Moana at approximately $5.5 billion, represents AustralianSuper’s largest single direct real estate deal.
The deal was executed through AustralianSuper’s partnership with QIC, the third largest investment manager in Australia. QIC was awarded an open-ended mandate from the superannuation fund in late 2013 to identify and execute investments in prime US retail properties. Ala Moana represents the first acquisition under the venture.
The Ala Moana Center is the world’s largest open-air shopping mall, with 2.2 million square feet of retail space. The property is currently undergoing a major expansion, with 660,000 square-feet of new retail space and 1,000 additional parking spaces slated to open later this year. AustralianSuper will pay A$850 million on signing the deal and pay the remainder late next year after the redevelopment has been completed.
“This deal demonstrated how the size and scale of AustralianSuper allows Australians to be a part of global investment opportunities to which they might not otherwise have access,” said Mark Delaney, AustralianSuper’s deputy chief executive and chief investment officer, in a statement. “We will continue to look for appropriate opportunities to expand and improve our property portfolio over the coming months.”
“QIC highly values its association with AustralianSuper both in Australia and North America,” added Steve Leigh, managing director of QIC Global Real Estate. “We are delighted to have assisted AustralianSuper to secure an interest in what is unquestionably one of the premier retail assets in the United States.”
AustralianSuper will hold approximately A$7 billion in property assets after the Ala Moana deal is completed, and aims to allocate approximately 10 percent of the its total assets to real estate over the next three to four years. The fund currently manages more than A$84 billion in assets. In 2012, it announced plans to begin making direct investments in certain asset classes, including in real estate, and struck its first direct property investment in December 2013, when it acquired a stake in centre:mk, a regional shopping center in Milton Keynes, UK for £270 million.