The C$90 billion (€62 billion; $84 billion) Public Sector Pension (PSP) Investment Board has bought out the portfolio of New Zealand’s largest unlisted property fund from Sydney-based fund manager AMP Capital for more than NZ$1 billion (€647 million; $882 million), according to an AMP statement.
The portfolio comprises 18 assets in commercial office, industrial, retail and some still in development. AMP will continue to provide management services for the fund with the same team, a spokeswoman explained. The only thing that has changed for AMP Capital Property Portfolio (APP), she said, is the underlying investors.
One of the previous investors in APP was the NZ$25 billion New Zealand Superanuation Fund. Matt Whineray, chief investment officer for the Guardians of New Zealand Superannuation, told local media that the sale was timed to take advantage of favourable market conditions. “As a long-term investor, the NZ Super Fund has a greater ability than many investors to choose when to realise its investments,” he said. “The opportunity to sell the portfolio to a single buyer was an attractive one.”
Set up in 2008, some of APP’s larger assets include the 646,000 square foot Botany Town Centre and the 431,000 square foot Manukau Supa Centre in Auckland, as well as the 13-story office building PricewaterhouseCoopers (PwC) Tower and its adjoining retail facility Capital on the Quay in Wellington. The fund is open-ended fund, but PSP has not disclosed any plans to enlarge it as of yet.
Commenting on the transaction, APP general manager Stephen Costley said: “This is a great result for all parties involved in the transaction. The vendors have realised their strategy to sell at a price that delivers value for investors, the purchaser is acquiring a quality, diversified property portfolio, AMP Capital retains its management of these assets and the transaction highlights the strength of the New Zealand economy and its status as an attractive investment destination.”
Globally, AMP Capital has A$143 billion (€99 billion; $135 billion) of assets under management across all asset classes. In January, the firm drew an extra $90 million of capital from Canada Pension Plan Investment Board (CPPIB) and United Arab Emirates sovereign wealth fund Abu Dhabi Investment Authority (ADIA) for a $670 million retail redevelopment project in Australia.
In the Asia-Pacific region, PSP’s most prominent real estate transaction was the A$1.9 billion privatisation of Charter Hall’s office, completed in 2012 in a club venture with GIC Private Limited. To date, PSP has C$11 billion allocated to real estate globally, just short of its target of 13 percent of its portfolio, according to PERE’s Research and Analytics Division.
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