The fund has been active in the US property market, is targeting top-tier secondary markets poised for growth and only just attracting significant capital flows.
“Secondary office markets like Sacramento are poised for growth, driven by strengthening economies,” AMP Capital global direct property fund manager Tim Fallet said.
“We want to position ourselves ahead of the capital flows, de-risk the asset by capturing a good share of leasing activity to achieve a stabilised 90-95 per cent occupancy profile and resell into a rising market to an investor hungry for core investments.”
The new acquisition was purchased for US$29.4 million and is situated within walking distance of the California State Capitol building. Not surprisingly, it has a strong government and lobbyist tenancy profile.
It is also one of only six non owner-user buildings in the CBD with a Leadership in Energy and Environmental Design (LEED) Gold certification.
Mr Fallet said the current economic market is making offshore investments attractive to Australian local super funds.
“Australian real estate is currently in high demand,” Mr Fallet said.
“There’s a lot of domestic and international capital chasing local property but the Aussie market isn’t big enough to absorb these capital spikes.
“As a result, a number of local super funds are considering an offshore strategy again and we are well placed to assist.”
Mr Fallet added that the fund is watching “further investment opportunities in Europe and Asia”.
