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Dutch pension fund BpfBOUW makes first foray into Australian real estate

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GLOBAL - Dutch pension fund BpfBOUW has gained exposure to the Australian real estate market for the first time by investing in three existing core funds.

The €31bn pension scheme for the Dutch building industry is carrying out a strategy to increase the global diversification of its property portfolio.

It already has investments in the Asia Pacific, including Singapore, Hong Kong, Japan and China, as well as a small exposure to India and South Korea.

Bouwinvest, the real estate asset manager of BpfBOUW, identified 2011 as a good time to expand the portfolio into Australia and made investments in three real estate funds before the end of the year.

Stephen Tross, director of international investments director at Bouwinvest, declined to disclose the names of the funds, but said they were focused on core office and retail assets in major cities.

“We closed three investments just before year-end,” he said. “It was an area we have been looking at carefully last year.

“We are still growing our international portfolio, and with the crisis, the opportunities - especially in the core space - are limited, so you have to see where the best opportunities [are].”

Tross said Australia’s economy was benefiting from population increase, rich mineral resources and growth from China, while office supply was constrained in Sydney and Melbourne.

“There are strong fundamentals there and relatively high interest rates, which gives you a high direct property return as well,” Tross added.

Bouwinvest will continue to be a net-investor in real estate markets outside the Netherlands, particularly in Europe, the US and Asia.

Tross said: “We are looking for the right opportunities with a core risk profile and moderate amount of leverage.”

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