SWITZERLAND pension fund Swiss AFIAA Foundation said its 1.5 billion Swiss Franc vehicle is on the lookout for more Melbourne investments as it aims to double the fund to 3 billion Swiss Franc over next five years.

AFIAA recently settled on the $161.5 million acquisition of 114-128 William St, which coincidentally is anchored by local superfund Hostplus.

AFIAA acquired the property from Singapore’s the Straits Trading Company, paying a big premium over the book value of $134 million.

The sale delivered major windfall for Straits Trading, which bought the asset only 17 months ago for $125 million from Kyko Group.

The 23-storey building comprises around 21,000 sqm of space.

AFIAA asset manager in Sydney Jürg Erismann said property will be added to the AFIAA Global fund.

“With this recent acquisition, we are expanding our involvement in the Asia-Pacific region. We see Melbourne in particular as offering further potential for rental growth in prime locations.

“As such, we are continuing to look for suitable properties in the city,” Erismann said.

The AFIAA Global fund currently has real estate assets totalling around CHF 1.5 billion. Around 46% of the portfolio is in Europe, with 30% of the properties in North America and the remaining 24% in Australia.

“The same is true of Sydney, where we have had investments for a number of years. The positive trend on the office markets is also confirmed by recent studies by the international real estate agent and consultant JLL, which show rising demand for office space in Melbourne in ten successive quarters.

“This is reflected in the high level of space take-up. The vacancy rate has fallen continuously since 2013, with rents in central locations increasing steadily over the same period,” he added.

AFIAA CEO Dr. Stephan Kloess said the fund is looking to double its size by 2021.
“Taking yield and diversification aspects into account, we are looking to expand our portfolio to up to CHF 3 billion by the year 2021.

“Our focus will be on core-plus investment properties in prime locations in Europe, North America and Australia,” Kloess said.

Speaking about its Melbourne acquisition, Kloess said “We are also happy for our acquisition targets to offer potential in their tenant structure, e.g. in terms of the vacancy rate or, with respect to the costs side, a need for refurbishment.

“Our active asset management allows us to leverage this potential in order to secure or increase our long-term yields.”

Australian Property Journal