There is a wave of institutional investors turning to both domestic and offshore retail property to diversify investment portfolios, says property-focused fund manager TIAA Henderson Real Estate.
Speaking in Sydney yesterday, TIAA Henderson Real Estate director of retail property Myles White said with large inflows into super funds, investors are looking for new places to allocate capital.
“With [the Australian superannuation] market there is a huge amount of money pouring into all of the super funds and that money has to be allocated somewhere [and] there is tending to be a growing allocation towards property,” Mr White said.
Mr White highlighted the reason investors want retail property as an asset is because of the strong income it generates and its ability to grow.
“[For] those in the pension phase [retail property] is a good income stream coming through, [and for] those in the accumulation phase it is a good way of growing their asset base,” he said.
Mr White also added that given the current low interest rate environment it has made retail property an attractive investment option for many institutional investors.
“I think property and retail property is always seen as a good hedge in that environment and if interest rates do [increase] rapidly, well then other forms of investment will become more attractive to the super funds,” Mr White said.
Mr White also pointed out that pension funds and sovereign wealth funds around the world are looking to property as well.
“There seems to be huge pots of money which are seeking an investment home from all parts of the globe and the allocation towards property seems to be increasing,” Mr White said.
“In many of these pension funds and there seems to be an incessant demand for quality property,” Mr White said.
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