Better than benchmark: ISPT property fund books 13.5pc
Super fund property platform ISPT has outperformed its benchmarks, with its main fund booking a 13.57 per cent total return for the 2017 financial year.
The ISPT Core Fund now holds $11.6 billion in assets, with investments in trophy assets including 161 Castlereagh Street in Sydney, 1 William Street in Brisbane and 500 Bourke Street in Melbourne.
The core fund delivered a 13.85 per cent gross return, comprising capital growth of 8.25 per cent and an income return of 5.61 per cent. Its net total return was 13.57 per cent.
That put the fund comfortably above the IPD/Mercer Unlisted Pooled Property Fund Index, which recorded 12.05 per cent for the year. The core fund also outperformed another hurdle, of achieving a real rate of return of 6 per cent annually over a 10-year investment cycle.
The ISPT platform, which invests in real estate on behalf of more than 30 industry super and government funds, has five smaller funds along with separate mandates.
In all, its assets under management grew 16.2 per cent in the past year to $14.1 billion.
Among its recent headline investments, ISPT’s core fund took another 25 per cent stake in the Myer Centre in Brisbane, which it jointly owns with Vicinity Centres.
It also took a 50 per cent stake in the retail and office components of Cbus Property’s $1.25 billion mixed-use development on Collins Street in Melbourne.
The diversified fund is not averse to taking charge of development itself, with work under way on a new office tower on Spring Street in Melbourne that will become the new headquarters for Australian Unity.
The core fund, run by Mark Bassett, has embarked on a fresh review after it came to the end of its most recent three-year strategy.
“Previous investment strategies were designed to transform the fund and take advantage of favourable market conditions following the GFC,” Mr Bassett wrote in the annual report.
“As the Australian property cycle matures, and changes in the global economy accelerate, the forward strategy will focus on the opportunities to leverage the financial capacity of the fund to build on this success.”
Chief executive Daryl Browning flagged a number of challenges ahead for the sector, including an increased focus on the user experience of office and retail property.
“The digital revolution has accelerated the structural changes challenging many business models across the world,” he wrote.
“We’ve been carefully assessing the impact of these changes on ISPT, our properties, our markets and investors.”
