While the properties are a sliver of AustralianSuper’s $300 billion of assets, they show the increasing pitfalls for pension funds in unlisted markets.
AustralianSuper, the country’s largest superannuation fund, is facing further losses on US property assets as a lender prepares to take back a vacant Washington, DC office tower it owns with Canadian fund giant Brookfield.
It’s the latest setback for AustralianSuper’s US property investments, which also include the world’s largest open-air shopping centre in Honolulu, half-owned by Brookfield. Broker estimates suggest the Washington offices have suffered heavy valuation losses, while Brookfield reports show the centre’s value has fallen by about $US800 million in the past two years.
In 2015, real estate was a relatively safe bet. AustralianSuper bought into the Brookfield office portfolio that year, in a deal that valued the Washington buildings at $US1.3 billion. But values in the downtown DC area have now tumbled by between 25 per cent and 60 per cent from their peak, according to real estate broker Cushman & Wakefield, which thinks that market is still to hit a bottom.
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