The role of super funds as an alternative source of institutional-grade debt funding could soon expand, as UniSuper makes its first investment in Australian commercial mortgage-backed securities (CMBS).
The fund said it is “leading the way” by investing $250 million in CMBS issued by the Charter Hall Retail Real Estate Investment Trust (REIT).
This will be the first investment for UniSuper’s new CMBS portfolio, which is managed by Colonial First State Global Asset Management.
UniSuper’s chief investment officer John Pearce said the transaction would offer significant benefits for members.
“Given our experience, investment strategy and horizon, UniSuper is well placed to capitalise on investment opportunities such as this, and we remain open to investing in similar opportunities in future,” he said.
The existing Charter Hall Retail REIT CMBS facility will be refinanced by a placement of notes for a four-year term, ending in September 2015.
The AAA-rated note includes a margin of 1.8 per cent over the benchmark interest rate.
It will be backed by a large collateral pool of sub-regional shopping centres and freestanding supermarkets valued at over $737 million and representing a loan-to-value ratio of 33.9 per cent.
The transaction remains subject to completing documentation and rating agency confirmation.
