London office squeeze lures Australian fund with A$200 billion
Rents are climbing sharply in the most coveted districts, especially for the few new developments nearing completion
[LONDON] One of Australia’s top pension funds is doubling down on European real estate, zeroing in on London offices as global investors come back to the city.
Aware Super is seeking more deals after ploughing A$2 billion (S$1.7 billion) into UK and European real estate since opening a London office about two years ago, according to Alek Misev, head of real estate at the A$200 billion fund.
It is part of the fund’s plan to invest billions more in property and other assets across the region in the next three years.
“We have identified Europe as a very critical region for us,” Misev said in an interview in London, adding that the city’s offices were “a standout opportunity” due to a lack of supply and strong demand for high-quality space.
“We are keen to do more, not just in the UK, but also in Continental Europe,” he said.
London office vacancies more than doubled after the pandemic, but a shortage of new projects has created a severe supply squeeze for top-tier space.
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Rents are climbing sharply in the most coveted districts, especially for the few new developments nearing completion. US investment in London offices surged 33 per cent in the first half of 2025 from a year earlier, JLL data showed. Aware’s push into European real estate comes as some large investors pull back from the US amid mounting political and economic uncertainty.
Europe’s appeal lies in its diversity, Misev said, which creates market inefficiencies while also offering geographical variety. The fund made a big bet on London offices this year by forming a joint venture with Delancey Real Estate that’s already invested half of its £1 billion (S$1.7 billion) target.
“It’s an opportunistic play from us, not necessarily a long-term play,” said Misev, referring to the venture. “We will look to sell at some state in the future based on when we have executed on our business plan,” he added.
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The fund is also targeting other types of property assets, such as logistics and student housing, as well as more niche sectors such as self-storage.
Aware picked the UK for its first overseas office, opening in 2023 with a pledge to invest A$10 billion over three to five years across property, infrastructure and private equity.
It has already deployed more than A$3.5 billion, mostly in real estate, and built a 25-person team, deputy chief investment officer and head of international Damien Webb said in the same interview.
Aware’s global asset hunt underscores a broader trend among Australia’s A$4.3 trillion pension fund industry.
With the system expanding rapidly, the largest players are outgrowing local opportunities and increasingly directing capital abroad. For the biggest funds, about half of total assets are now offshore, a share that’s expected to rise further as they continue to grow.
“There is definitely momentum and a drive for us over the coming decades to expand our presence and be able to source more investment opportunities on a global scale,” said Misev.
While around 10 per cent of Aware’s overall portfolio is in US holdings, it currently does not have plans to open an office there.
“If you go to North America, it’s very expensive, frankly, because of the office space and the cost of human capital,” said Webb.
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