Australian superannuation funds are set to grow from holding approximately $3.2 trillion today to $7.2 trillion by 2035, driven by mandatory employer pension contributions rising to 12 percent this year. With this surge in inflows, the Australia pension fund industry is set to leapfrog Canada’s and the UK’s to become the second most valuable in the world by 2030, behind the US.
Rasheed Hassan
These super funds already hold approximately $812 billion of assets abroad, but this will rise to $2.6 trillion in the next decade, according to the Super Members Council of Australia, the lobby group for super funds. The sheer magnitude of the growth in inflows, plus limited opportunities to deploy domestically, necessitates global diversification.
The size of these numbers is generating a lot of buzz in the real estate industry, with expectations that a sizable proportion of this $2.6 trillion will be deployed into assets and portfolios around the world. However, it is important to put these figures in context.
Firstly, we do not believe we are about to see a ‘wall’ of Australian pension fund money suddenly hit real estate markets. While real estate will be a recipient of super fund capital, it will sit alongside other asset classes, including infrastructure, credit and equities. We anticipate new real estate investments by the super funds will take place in a considered way over a number of years and through a variety of routes to market.
Ben Schubert
Secondly, this is not a new buyer group, although there are new players. Taking the EMEA region as an example, according to MSCI data, over $500 million of Australian capital was invested in real estate – mainly by the super funds – in H1 2025, putting 2025 already well-ahead of the pre-covid-19 annual average of $850 million.
Aware Super and AustralianSuper – the two giants of the industry – have been particularly acquisitive. The former, for instance, intends to invest more in the region, favoring offices, logistics and student housing, after spending $1.3 billion in UK and European real estate since it opened a London office in 2023. Given the sheer scale of the market, it also plans to pursue more opportunities in the US.
These giants will continue to lead the charge, but what is possibly more noteworthy is which groups will follow them. Changes to Australian superannuation rules have driven a huge amount of consolidation in the sector and created a new wave of funds of a size that can compete for the world’s largest assets alongside their longer established peers. For example, in late 2024, CareSuper and Spirit Super merged to create a new fund with over 573,000 members and over A$53 billion ($34 billion; €29 billion) in funds under management.
The ‘Maple Eight’ model
We are already seeing these super funds quietly increase real estate activity in some markets, although many are choosing to make their first deals via indirect structures. It is likely, however, that in time we will see more super funds open offices on the ground and do deals directly.
We see their activities following similar patterns to those of the ‘Maple Eight,’ referring to Canada’s eight largest pension funds, which have been investing outside of Canada for many years.
For the most part, they invested indirectly when they first expanded into the US and then Europe and Asia-Pacific, but as their deployments increased alongside their experience and team sizes, so too did their direct investments.
Australian super funds are emerging as a force in global real estate markets. In many regions which have largely seen an absence of institutional money in the last couple of years, their presence will be welcomed and contribute to the broader recovery in real estate turnover and pricing levels.
