QSuper makes new investment in US recovery
07 January 2022
5
min read
QSuper has invested around $1 billion in US transport and industrial assets this year, showing confidence in the American economic snapback.
The purchases position QSuper to take advantage of the rise of e-commerce in the post-COVID recovery through holdings in transport and logistics depots across 14 American states.
The investments include:
- Majority ownership of the Sunbelt Logistics Portfolio. This is an investment in 51 logistics buildings in high-demand urban locations in the US, including Austin, Dallas, Houston, Denver and Oklahoma City. They are held in partnership with Brookfield Real Estate Secondaries.
- Majority ownership of the Mercury Trust portfolio. This includes 27 trucking depots leased to major transport operators in the US Midwest and South. The investment comes with the opportunity to invest further to expand, acquire, and develop more such properties, which are managed by Invesco Real Estate.
Responding to the Amazon phenomenon
QSuper Chief Investment Officer and acting CEO Charles Woodhouse said the investments gave QSuper members further exposure to e-commerce, where sales were expected to account for 20% of all retail sales in 2021, rising to 30% over the next decade.
The Amazon phenomenon has changed both the nature of retailing and the industries that support it. We see this as a means of giving QSuper members access to an important supporting industry,” Mr Woodhouse said.
“The flow-on effect is the increased demand for industrial real estate assets to store and distribute goods purchased online. This demand has seen unprecedented growth in rents that tenants are willing to pay and, in turn, return potential for landlords and investors.”
Mr Woodhouse said QSuper had focussed on buying industrial assets close to city centres and major logistics infrastructure, including highways, rail, ports, and airports.
The Sunbelt purchases are located on average less than two kilometres from major transport arteries, giving tenants access to large, dense population centres with limited transportation costs.
The portfolio is 95% occupied by 180 tenants with either national or regional operations.
Latest investments work together
The Sunbelt deal comes just months after a separate deal that gives QSuper control of the 27 transport hubs designed to connect local markets with national distribution networks.
“This involves delivery of goods to hubs in regional centres, which are then reshipped or collected for delivery to their destinations. Typically, these are pallet loads of goods,” Mr Woodhouse said.
He said the investments complemented each other.
“Both investments seek to take advantage of the rise of e-commerce and the related demand for industrial assets to store and facilitate the distribution of goods purchased online."
Expanding our stable long-term assets
QSuper has a vast US investment portfolio, which also includes office buildings in Manhattan, Bellevue, Chicago, and Austin and multi-family properties in Washington DC and Virginia.
Mr Woodhouse said these assets offered long-term, stable returns for members.