AMP Capital's Global Direct Property Fund has expanded its US property holdings, purchasing a city office tower in Sacramento, California.
The US$29.4 million deal represents one of many US property purchases it has made as it focuses on top-tier secondary markets with early signs of potential growth, the property manager said.
"Secondary office markets like Sacramento are poised for growth, driven by strengthening economies," said AMP Capital global Direct Property Fund manager Tim Fallet.
"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," he said.
AMP Capital said it acquired the property on a comparably lower average than other sales over the last decade, while economies of scale could give it the edge over landlords in the area. The building is one of the six non- owner-user buildings with LEED Gold certification in the city's business district.
Fallet said Australian super funds were increasingly looking to overseas markets to satisfy their property strategies as the Australian market became crowded due to demand for Australian property and the size of the market.
AMP Capital began re-investing in US property this year for the first time since the financial crisis, purchasing an office building in Boston, Massachusetts for US$17.6 million. It has also acquired an office block in Tampa, Florida for US$32 million and a land block for $US2.5 million.
"While the fund currently has a buy-side bias to the United States, we have a watching brief on further investment opportunities in Europe and Asia," Fallet said.
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