The Australian - Features AMP Capital set to seize overseas opportunities
02.21.2013
Bridget Carter, Funds Management
GIVEN the strong Australian dollar and improving US market, one would expect local investors to be interested in offshore real estate markets again, AMP Capital's property director Andrew Bird says.
But the interest has not been as strong as he had hoped, with some investors still nursing their wounds after their offshore investments soured during the global financial crisis.
Still, the group is making the most of opportunities through its Global Direct Property Fund, which purchased an office building and land in Tampa, Florida for $US34.5 million ($33.3m) and a Boston office for $US17.6m in recent weeks.
``We haven't seen a big move yet,'' Mr Bird said about superannuation funds, adding that there were still some investors who had bought offshore and done well.
``Logic would say that while the currency is strong, it is a good time to invest internationally, so I would think that in the next two to three years, we would start to see some increased interest from pension funds.''
Mr Bird oversees $16 billion worth of property funds under management for AMP Capital.
His career began at the British Rail property board followed by stints in Indonesia for real estate broker Richard Ellis (now CBRE) and Colonial First State Global Asset Management. Much of the property funds he manages for AMP Capital are in Australia, but the group has a listed office trust in New Zealand, which is run in conjunction with the Abu Dhabi Investment Authority, and an industrial REIT in Singapore, which is run jointly with AIMS Financial Group.
About 60 per cent of the group's real estate portfolio is shopping centres, with the remainder office and industrial real estate.
Major Sydney skyscrapers, such as the iconic AMP Building at Circular Quay, NAB House at 255 George St and Angel Place are among those under its management.
The properties are owned either within pooled funds or separate accounts, Mr Bird said.
Institutional investors were attracted to pooled funds, but more were becoming interested in separate accounts, where AMP invested solely for a particular group, Mr Bird said. Among its separate account clients were groups such as Sunsuper or the Government Employees' Superannuation Board of Western Australia.
``Last year we added ADIA and CPPIB (Canadian Pension Plan Investment Board) as separate account businesses, so that's a large part of our business, where we run segregated mandates just for a particular client.''
Growing the property business was very much part of the strategy of AMP, which took over Axa Asia-Pacific Holdings in 2011.
AMP Capital's recent $5.8bn unwinding of joint ventures with Westfield saw AMP's joint ventures with the shopping centre giant reduce from 10 to four.
``That really clarified and simplified the relationship,'' Mr Bird said.
The deal also paved the way for AMP's $970m redevelopment plans at Sydney's Macquarie Centre and Pacific Fair shopping centre on the Gold Coast, and has also generated a new partnership for AMP, with Canada Pension Plan Investment Boardand the ADIA pouring $872m into an AMP fund.
While it favoured developments as a way to grow its business, AMP was also planning to buy properties if the right opportunity came along, he said.
After some job cuts, Mr Bird said the group has recently been hiring staff for its shopping mall developments, but economic conditions remained challenging.
``There's not going to be a boom and a fairly slow grind in terms of employment,'' he said.
``Australia is in a pretty good spot, but that's not to say everything is fantastic economically.''
