Where we invest

Lyndon: Hello and welcome to another episode of Know your assets, the series where we introduce you to some of the things that we invest in here at UniSuper. My name's Lyndon, and with me in the studio today is Kent. He's the Head of Property investments here at UniSuper. Kent, welcome and thank you for being here.

Kent: I'm very happy to be here, Lyndon.

Lyndon: Now, Kent, are you able to give us a little bit of the lowdown on your role as Head of Property and what it is exactly that your team are doing for UniSuper members?

Kent: As the Head of Property, I'm responsible for about $8 billion of unlisted property with the team, of which two thirds is managed internally.

Lyndon: Property investments could be considered a bit of a broad term, Kent. Are you able to give us a bit of a flavour for what exactly property means in a superannuation context?

Kent: Yeah, Lyndon—and specific to UniSuper as a domestic investor into unlisted real estate—it's a very diversified portfolio. It varies from office assets in Sydney (that are fully leased, I might add) in the Sydney CBD, logistics assets in Sydney and Melbourne, some of which are fully developed and some of which we're going to develop out over the next decade. Then, shopping centres like Pacific Fair up on the Gold Coast, Macquarie Shopping Centre up in Sydney and Karrinyup Shopping Centre in Perth which we'll discuss today.

Lyndon: UniSuper actually owns Karrinyup Shopping Centre outright but you and your team don't, say, run it day to day. How does that side of things work?

Kent: UniSuper has appointed The GPT Group to manage that asset and they have a full team sitting there in Perth—we'll meet some of those team members—but they also have a full team in Sydney and Melbourne. Within UniSuper, we've got Nick Stephens, the Senior Manager of Property, who's got primary responsibility. He's having the day to day interaction with GPT.

Lyndon: So, Kent, you were recently in Perth to spend some time with the GPT team there which includes Trudy Cook, the General Manager of the centre, and Scott Nugent from GPT also. Before we meet them though, are you able to give us a bit of a rundown on the investment—what do we need to know?

Kent: Karrinyup is an asset that UniSuper has owned for over 30 years. It's a shopping centre by its name but obviously it's a mixed use opportunity. It has residential, it has dining, lifestyle entertainment and it's an investment now (post its redevelopment) that's in excess of $1.5 billion.

Lyndon: Amazing. Alright, without further ado, let's get to know Karrinyup Shopping Centre.

Kent: Just 12km north west of the Perth CBD and within a stone's throw of the Indian Ocean, Karrinyup Shopping Centre is a central pillar not just for the local community, but for the state of Western Australia. Following the extensive redevelopment and expansion between 2018 and 2021, the centre has grown to become the second largest shopping centre in the state. For locals, Karrinyup represents the west coast's home of world class retail.

Trudy: Before Karrinyup, even before the 2018 expansion project, if you wanted to find big flagship brands, you'd need to head to Sydney or Melbourne. But Karrinyup changed that. It's brought world leading brands to Perth and boosted the local community. It's not just about shopping though. We've got residential zones and recreational facilities with parklands nearby. We're effectively the community centre for the area, and we draw people from right across the state.

Kent: First opened in 1970, UniSuper's held a long-term stake in Karrinyup, with our investment tracking back to the 1990s. In 2012, we secured full ownership of the centre. Working with Scott and his team at GPT means we're across the large and the small details. That helps us to ensure that things are running smoothly and in turn leads to greater outcomes for UniSuper members.

Scott: The way we work together means we're able to manage the site here at Karrinyup efficiently and easily. I'm in direct contact with UniSuper every week, so they're across what's happening at all times.

Nick: Karrinyup continues to be a great investment for the Fund. In terms of trade and turnover, it really dominates its market. It actually has the 16th highest retail trade turnover of any shopping centre in the country, is the highest in Western Australia by a substantial margin and it continues to perform above our expectations.

Sustainability is an important aspect of how UniSuper manages its directly owned property portfolio. At Karrinyup, we're focused on maximising energy and water efficiency and minimising waste going to landfill. The centre's actually rated very highly for energy efficiency and is currently certified carbon neutral.

We're also focused on improving the overall experience of our tenants and their customers at Karrinyup through the introduction of new retailers and retail services, new dining and entertainment experiences, as well as looking to the future expansion options for the centre. It's important to us that Karrinyup continues to be a recognised and much loved focal point for the local community.

Trudy: We've got a group of mall walkers, and it's one of the largest in the country. It's a group of mainly retirees who meet up for a walk around the centre, and they catch up with each other. It's really wonderful to see. For the nighttime hours, we have fantastic dining entertainment options. It's truly first class.

Kent: At UniSuper, we see the future of retail as a blend of low-friction online transactions and world class bricks-and-mortar experiences. With a trajectory of growth that shows no signs of slowing¹, it's easy to see how Karrinyup Shopping Centre will continue to hold a special place in the UniSuper property portfolio for years to come.

Lyndon: Wow Kent, what a fantastic overview of not just Karrinyup Shopping Centre but also property investing more generally. Speaking of which, UniSuper members can generally choose how to invest their super, so for anyone out there who might be wondering: which of our investment options actually feature property?

Kent: Property and Karrinyup for that matter are available to our members through many of our pre-mixed options but also our Defined Benefit Division.²

Lyndon: Alright, thank you so much for joining us today, Kent it's been absolutely awesome having you here. And thank you to you as well for watching, don't forget to join us in the next episode of Know your assets where we introduce you to another great UniSuper investment. We'll see you then.

¹ Past performance is not an indicator of future performance.

² As at 30 September 2024. Past performance is not an indicator of future performance. Consider the PDS and TMD on our website, and your situation, before making decisions, because we haven’t. Please consider the appropriateness of the information having regard to your personal circumstances and consider consulting a licensed financial adviser before making an investment decision based on the information provided. Before making any decision regarding switching your super, consider the possible effects it could have on things like the fees you pay and the tax on your super. There could be other effects too, so it’s best to seek financial advice if you are unsure.

The information in this video is general in nature and it doesn’t take into account your financial situation, needs or objectives. Before making any decisions about your super, consider your circumstances, the relevant PDS and TMD on our website, and whether to seek financial advice.

Comments on the companies we invest in aren’t intended as a recommendation to include those companies in your own portfolio. Our portfolios have been designed to suit us, and they may not be appropriate for others. Investment returns aren’t guaranteed, and past performance isn’t a reliable indicator of future returns.

Prepared by UniSuper Management Pty Ltd (ABN 91 006 961 799, AFSL No. 235907) on behalf of UniSuper Limited (ABN 54 006 027 121) the trustee of UniSuper (ABN 91 385 943 850, AFSL No. 492806) the fund.

Lyndon: Hello and welcome to Know your assets, the series where we introduce you to some of the things that we invest in here at UniSuper. My name is Lyndon and with me in the studio today is Penny Heard, she's the Head of Australian Equities in the Investments team. Penny, welcome, thank you for being here.

Penny: Thanks very much, Lyndon.

Lyndon: So you're part of the investments leadership team. What does your role involve day to day, Penny?

Penny: I'm Head of Australian Equities and myself and the team, we invest UniSuper’s assets into the Australian listed market. When we look at investments, obviously the financials are important, but not only that, the management, the board composition and governance and any risks that might be associated. As a result, I think we're really attracted to quality companies with long and enduring cash flows that we think can continue to deliver great returns for members over the long term.

Lyndon: So within Australian equities—the companies and brands that we invest in, are there any particular ones that folks might be familiar with?

Penny: There are a number of household names that the members would know—for example Telstra, Woolworths, and what we're here to talk about today being Transurban.¹

Lyndon: Yes. And speaking of Transurban, Penny, we actually went down to Transurban and met the team there and caught up with Michelle Jablko, the new CEO. In terms of the relationship between UniSuper and the Investments team and Transurban, how does that unfold? Who takes charge of that day to day?

Penny: Yeah, look, that's really spearheaded by Matthew Spence. But it's a significant investment for all of UniSuper, so we're very, very engaged.

Lyndon: Amazing. Alright, let's start with some key facts first about Transurban, a bit of a spotlight on the company. What do we need to know?

Penny: So Transurban sits within the Australian asset class. It's a large infrastructure company, and it owns and operates a number of toll roads, be it in Queensland, New South Wales, Victoria, and in North America. It's got a market capitalisation of around $41 billion², so it's a significant company within the ASX, and UniSuper, we have around 11% holding³ in the company so it's a significant investment.

Lyndon: Alright. Well, with all that being said, let's get to know Transurban.

Michelle: We've got over 10 million customers who use our roads every day to get in and out of work, to go on holidays, get to the airport, to attend social events. And essentially what we do is we bring together the community need, the capital and the infrastructure to help those customers move around our cities efficiently, safely and sustainably.

All our board meetings, executive committee meetings, we start talking about safety. It's such a core part of our culture. We know when we build roads, we're also adding to sustainability. Just this year, we hit out 2030 Scope 1 and Scope 2 targets. So for 50% reductions, about seven years ahead of schedule. And that's through things like having renewable energy, having LED lighting through our tunnels.

If you're going to be here for a long time, you've got to be really mindful of the impact you're having.

Matthew: Here at UniSuper, we manage over 70% of our assets in-house. What does that mean? It basically enables us to deliver healthy returns to our members while keeping costs down. As a super fund, we're naturally drawn to what we call ‘fortress assets’. Fortress assets are unique. They’re hard to replicate, and they offer attractive and stable long-term returns. So Transurban really fits that profile for us.

Michelle: I think because we've got so many assets in so many markets, we're able to take what I call a long-term view. The West Gate Tunnel project, that's due to open in 2025. That will be really important for Melbourne. It's going to take 9,000 trucks a day off suburban streets. It's going to save people around 20 minutes during peak hour.

Further north in Sydney, we've just commenced construction on the widening of the M7. In Queensland, there are the Olympics coming in 2032. We're talking to government in Queensland about those.

Matthew: In terms of Transurban's ongoing growth, in Sydney they've got the WestConnex project and potentially over time, a second Harbour tunnel. In Brisbane they've potentially got the Logan and Gateway Motorway expansion projects.⁴

Penny: Beyond Australian shores. Transurban has a growing presence across North America.

Michelle: Our business is global, so we're in five markets, three on the east coast of Australia and two in North America. We've got a road in Montreal in Canada where, again, we're in discussions and planning for potential extensions.

Penny: At UniSuper, we know the value of great thinking.

Michelle: There's always a lot we're thinking about from an innovation perspective. So for example, pacemaker lighting, which really helps draw the driver along with the lighting. And then we're looking at new emerging technologies as well. So for example with a business out of Silicon Valley called Plus, essentially what we're doing is trialling automated freight. I’m really excited about the future.

Matthew: On the surface it looks like they're just building roads. But underneath that, there's a whole network of data. Transurban is constantly analysing and reviewing that data, looking for ways to improve efficiencies and to understand exactly what it is that their customers want and need.

Michelle: We've got strong population growth in the cities. If you say Sydney over the next 20 years is going to grow by 25%, Melbourne and Brisbane one and a half, two times that—we need to be a long-term trusted partner of all the people we work with, whether it's governments, the people that build our roads, and we need to continue to innovate.

Penny: As the company continues to grow and technology expands to allow for even greater insight, it's great to see Transurban's goal of a better-connected world becoming a reality. And as the company's largest investor, it's easy to see how UniSuper’s connection to Transurban will stay strong for years to come.

Lyndon: Wow, Penny, that has really brought Transurban to light in a whole new way for me.

Penny: It really has showcased the great opportunity Transurban represents in terms of an investment, but also the significant amount of work that UniSuper does in analysing and understanding the opportunity.

Lyndon: And Penny, if there are members out there who might be interested in their super having exposure to a company like Transurban, what are the investment options that feature the company?

Penny: Yes, members could look at some of the pre-mixed options that have the Australian equities exposure. Also more specifically the Australian Shares option. And for anyone in the Defined Benefit fund, they have a significant exposure to Transurban within that already.⁵

Lyndon: Amazing. Well, Penny, thank you so much for your time. Thank you for joining us and being here. And thank you to you also for joining us. Don't forget to join us next time when we take a look at another great UniSuper asset. We'll see you then.

The information in this video is general in nature and it doesn't take into account your financial situation, needs or objectives. Before making any decisions about your super, consider your circumstances, the relevant PDS and TMD on our website, and whether to seek financial advice. Comments on the companies we invest in aren't intended as a recommendation to include those companies in your own portfolio. Our portfolios have been designed to suit us, and they may not be appropriate for others. UniSuper takes no responsibility for comments made by Transurban. Investment returns aren't guaranteed, and past performance isn't a reliable indicator of future returns. Prepared by UniSuper Management Pty Ltd (ABN 91006 961799, AFSL No. 235907) on behalf of UniSuper Limited (ABN 54 006 027121) the trustee of UniSuper (ABN 91385 943 850, AFSL No. 492806) the fund.

¹ These investments are current as at May 2024 and are subject to change. They’re not being recommended for inclusion in personal portfolios.

² As at February 2024

³ As at August 2023

⁴ No assurance can be given that these potential opportunities will eventuate, or that Transurban will be able to participate in them. Transurban's ability to participate in any future projects or acquisitions will be subject to, among other things, applicable sales processes, applicable government processes and the receipt of relevant regulatory approvals.

⁵ As at May 2024. Consider the PDS and TMD on our website, and your situation, before making decisions. Before switching your super, consider the possible effects it could have on things like the fees you pay and the tax on your super. There could be other effects too, so it’s best to seek financial advice if you’re unsure.