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AustralianSuper enters UK retail property market with GBP270m purchase

AustralianSuper and Hermes Real Estate Investment Management Limited, on behalf of The BT Pension Scheme (BTPS), are to partner on the purchase of a 50 per cent interest (GBP270m) in a thecentre:mk.

The purchase of the Milton Keynes shopping centre is AustralianSuper's first direct investment for the property portfolio as part of its international investment management strategy.
 
thecentre:mk, which sits in the growth corridor between Oxford and Cambridge and spans 1.3 million sq ft of prime retail space, ranks as a top 10 UK shopping centre in terms of retail space provision. It is anchored by John Lewis, House of Fraser and Marks and Spencer department stores alongside 220 retail units. thecentre:mk attracts over 27 million customer visits every year. Hermes has consistently invested in thecentre:mk for approaching 40 years, working closely with all stakeholders, including the local authorities, retailers and the shopping public.
 
AustralianSuper was assisted by newly-appointed mandate manager, Henderson Global Investors. AustralianSuper and BTPS will become joint owners of the centre with Henderson Global Investors representing AustralianSuper’s interest. Hermes will remain as asset manager for the property.
 
Jack McGougan, head of property AustralianSuper, says: “thecentre:mk is an excellent asset and is the focal point for Milton Keynes’ city centre, with strong community support and excellent growth potential.
 
“AustralianSuper has been monitoring the UK retail property market for quite some time and thecentre:mk is an excellent fit for our portfolio as the dominant centre in a region which is one of the fastest growing in the UK.”
 
Chris Taylor, chief executive, Hermes Real Estate Investment Management Limited, says: “This is another milestone strategic partnership for Hermes Real Estate which we are delighted to announce. The disposal of a 50 per cent stake in thecentre:mk is consistent with our strategic plan to continue to diversify our real estate portfolio internationally.
 
“As a long term investor in Central Milton Keynes, we have a proven commitment to the city. Our primary strategic investment objective will be to deliver added value through continued proactive asset management. It is clear that in making their first direct real estate investment overseas, AustralianSuper share our long term vision to further consolidate the centre’s status as one of the UK’s most accessible and attractive regional retail and leisure destinations.
 
“We are delighted to be entering into this long term partnership and together with its strategic advisor, Henderson Global Investors, look forward to capitalising further upon the tremendous growth potential which exists within the centre’s catchment area by making thecentre:mk a truly dominant regional destination.”
 
Late last year AustralianSuper announced plans to commence direct investment within certain asset classes, including property, in an initiative that is expected to save hundreds of millions of dollars in fees for members. The strategy also gives AustralianSuper more direct control over the management of its investments. The appointment of managers in Australia, the UK and US to source and asset manage AustralianSuper's direct investment in properties is a key component of the long term strategy to identify attractive core property sectors and experienced investment managers to execute in those sectors.

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