Brookfield eyes Australian apartment market

Canadian giant Brookfield is making a push into the London condominium market and expects to eventually control an apartment business in Australia, according to Brookfield Property Group’s New York-based chairman Ric Clark.

“We have yet to make a commitment to build an apartment portfolio in Australia, but I expect at some point that will come,” Clark says.

Brookfield, which has $US225 billion ($320 billion) of assets under management, of which $US123 billion is in real estate, has long had a ­residential communities and apartments business in the US.

In Britain, Brookfield controls a number of London sites, including Canary Wharf, where about half of the 11 million square feet project will be apartments.

We are always looking for new acquisition opportunities as well. We pursue everything from one-off aquistions to large corporate transactions. It’s a little hard to say exactly where the next one is coming from

“We have identified a void in that (London) market and the need for an institutional owner to come in and build apartments, so we are capitalising on that,” Clark says in an interview from the group’s Brookfield Place office tower in New York, where the group recently completed a major refurbishment.

“There would be a huge appetite in London for institutional ­investment in apartments and I suspect ultimately, there will be in Austraila as well,” Clark says.

So far in Australia, institutional investment in apartments has been thwarted by the consistently low returns.

Despite the residential boom cooling in many global cities, ­investor interest in apartment ­development on the back of changing demographics appeared undiminished, he says.

Brookfield Property Group is considering entering Australia’s apartment market.

Last month international shopping centre landlord Westfield Corporation said it planned “many thousands” of apartments on or around its US shopping centres and already had approvals for apartments at its London malls, while the $92 billion AustralianSuper said it had poured a further $900 million into a mixed urban regeneration project in London’s King’s Cross.

Later this year, Brookfield expects to start work on its major Sydney project Wynyard Place, with talks under way with potential tenants, Clark says.

“In major cities around the world, assets are trading through replacement cost. Our focus has been on new development, which is why we are very excited about Wynyard.”

Brookfield’s work book has swelled to its largest so far with $US9 billion of development underway, of which $US8 billion is in the ­office and multi-family sectors.

There would be a huge appetite in London for institutional ­investment in apartments and I suspect ultimately, there will be in Austraila as well

It is also building seven million square feet of industrial property in the US and Germany.

“We are always looking for new acquisition opportunities as well. We pursue everything from one-off aquistions to large corporate transactions. It’s a little hard to say exactly where the next one is coming from,” Clark says.

The group’s Brookfield Infrastructure Partners is currently locked in a $9 billion takeover battle for Australian ports and rail operator Asciano.

Brookfield has been selling some assets — including a half stake in Melbourne’s Southern Cross office complex sold to Blackstone in December for $675 million — with Clark saying he saw no easing of the demand for real estate investments.

“We have seen no slowdown, and I think that’s true of the world’s most dynamic or resilient cities,” he says.

This article originally appeared on www.theaustralian.com.au/property.