The Future Fund of Australia has made its first major direct real estate acquisition, breaking the drought in investment-grade transactions since the beginning of the global financial crisis.
The acquisition is a one-third interest in a limited liability partnership that holds the Bull Ring Shopping Centre in Birmingham, UK, with a purchase price of £200 million ($375 million). The acquisition settled on Friday.
The Bull Ring Shopping Centre is Europe's largest city-centre shopping centre.
Mallesons acted for the Future Fund of Australia. The team was led by partners Andrew Erikson and Simone Menz.
"The size of the deal is significant in the United Kingdom real estate market, where very few investment-grade transactions have occurred since the collapse of Lehman Bros just over 12 months ago," said Erikson.
"The Future Fund is a unique investor, with a long-term investment horizon and no requirement for debt funding, which is able to take countercyclical positions in markets that traditional property investors have retreated from in recent times."
The Future Fund was established in 2006 and its property investments to date have been largely in property securities. This is the first direct real estate investment for Australia's sovereign wealth fund, which is looking to place up to $9 billion to $10 billion over the next few years in a global property portfolio comprising direct property, joint ventures and property developments.