Domestic superannuation funds are showing growing interest in deploying more capital into unlisted property as an alternative to their current cash holdings, according to Guy Sainsbury, senior investment analyst in Australian Unity Investments' (AUI) real estate team.
Sainsbury said domestic super funds had been long-term investors in real estate, but the volatility of equity markets during the height of the global financial crisis created portfolio issues for them.
Now that markets have "settled down" for a while, domestic investors are becoming more interested in assets that may have previously been considered niche, he said.
This formed the basis of AUI's push into the institutional space in relation to its unlisted property offering.
"In the areas where we are quite active in the institutional space - and that's healthcare and retirement - they're considered niche sectors here (in Australia), but they're very well-established in some of the other big markets, particularly the US and Europe," Sainsbury said.
"Those sectors remain of interest to global investors and also to domestic investors, depending on which asset class you're talking about."
Sainsbury said that while domestic funds have been investing into core asset classes - namely office, retail and industrial property - super funds would be looking to invest in more opportunities to grow their real estate portfolio.
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