AustralianSuper Predicts a Gloomy Future for Real Estate Globally

Must Read

As investments in the industry decline, Australia’s largest superannuation fund has expressed concern about the global real estate markets.

AustralianSuper, the country’s central superannuation fund, has emphasised that Australia’s resilient economy will alleviate the downward forecast on global property markets.

Bevan Towning, AustralianSuper Melbourne’s head of property, stated to AsianInvestor, “In general, we are cautious about the outlook for valuations in most sectors of property.”

He said that Australia has a brighter future in the lens of the said sector as compared to the US and Europe markets.

Mr Towning said they profoundly monitor the unlikely ballooning scenario in the UK and US relative to Australia.

Amid the growing unfavourable mood, Mr Towning claimed that despite the global economic slowdown, higher inflation, and peaking interest rates, the fund had made no significant changes to its geographic allocations this year.

He said, “Longer term, we still believe in the fundamental structural drivers of rents in the industrial sector.”

Last February, AustralianSuper increased its funding to European properties. However, Towning’s warnings regarding the European market may lead to fleeing from the bold move of adding the allocation.

Smaller Australian super funds and other institutional and pension funds around Asia are frequently under pressure to sell real estate and other assets to rebalance their portfolios. The sharp drops in stock and fixed-income asset values in 2022 brought on the above behaviour.

Towning added:

“We have the benefit of being in a growing fund with strong net cash flows.

“This tends to mean that allocation changes that arise from changing valuations in other asset classes don’t necessarily create pressure to sell.”

“The bigger and longer-term investors can withstand that, but among those whose asset mix is more highly regulated or have nearer term liabilities, some investors are having to redeem because they are over-allocated,” he said.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img