European property draws interest from HESTA

HESTA is investing in European alternative property via a new mandate with global real estate investment manager Heitman.

HESTA has provided an undisclosed sum to Heitman for investment in alternative property types, including self-storage, student housing, residential and aged care.

Since 2017 HESTA has had a mandate with Heitman through its US core investment strategy, which is worth about $240 million.

This additional mandate makes Heitman one of the $93 billion fund's largest international property managers. Its other property managers include ISPT (now part of IFM Investors), Nuveen Australia, and QIC.

"The new allocation with Heitman will support us to continue to build a well-diversified portfolio of property investments designed to help deliver strong long-term returns for our more than one million members," HESTA head of portfolio management Jeff Brunton said.

Meantime, Heitman said it is delighted to be expanding its relationship with the industry fund.

Managing director, European Real Estate Investment Caleb Mercer said: "Unlike the traditional property types, the alternative sectors are driven by needs-based demand and are undersupplied, making them less tied to economic cycles."

"We believe this makes them an attractive way to benefit from the price reductions available in Europe whilst mitigating exposure to uncertain economic conditions."