The Stichting Pensioenfonds BP stressed that the pan-European scheme would fully implement the Dutch pension plans as they stand at the moment – both for pensions accrual and accrued pension rights.BP has already housed several European pension plans in its OFP in Belgium.Commenting on the pension fund’s potential move, DNB spokesman Ben Feiertag said it would be too easy to conclude the new financial assessment framework (FTK) would be stricter than the “more principle-based” supervisory framework in Belgium.“In Belgium, the sponsor’s commitment is crucial, whereas this issue is less important in the Netherlands, as pension funds must always be able to stand on their own legs,” he said.Last year, the Dutch pension fund returned 0.5% on investments.Over the same period, it spent €501 per participant on administration and 0.49% of its assets on combined asset management and transactions.The pension fund also announced that it terminated its asset management contract with AXA Investment Partners in November, as part of plans to simplify its investment policy.Since then, the scheme’s asset management has been carried out by the remaining asset managers BlackRock and BNP Paribas Investment Partners.The pension fund, thanks to a voluntary additional contribution of €32.5m by the employer, was able to increase the pension rights of its active participants by 2.5% this year, while also granting an indexation in arrears of 0.27%.Deferred members and pensioners received inflation compensation of 2.5%.BP’s Dutch pension fund has approximately 4,300 participants in total. The €900m Dutch pension fund of oil and gas company BP has said it is seriously considering joining the company’s Belgium-based, pan-European scheme at the request of its sponsor. In the pension fund’s latest newsletter, trustee Paul Koole said such a move would cut costs and increase efficiency for the energy giant’s Dutch pension arrangements.“As a European scheme, the BP pension plan would be less affected by increased financial buffers, as prescribed by the new financial assessment framework,” he said.In addition, joining a pan-European pension fund will also have a positive impact on the board’s level of expertise, Koole said.
Norges Bank Investment Management (NBIM), which runs Norway’s NOK7.1trn (€776n) Government Pension Fund Global (GPFG), is excluding several stocks after the Council on Ethics advised their activities in tropical forests posed unacceptable environmental risks.The companies, two Malaysian-based firms – IJM Corp Bhd and Genting Berhad – and South Korean steel-maker POSCO and Daewoo International Corp were being excluded from the investment universe of the former oil fund, NBIM said.It said: “The companies are excluded based on an assessment of the risk of severe environmental damage.”In letters to NBIM, the Council on Ethics cited the conversion by Genting Berhad subsidiary Genting Plantations of tropical forest into oil palm plantations in Indonesia and Malaysia as a reason to consider exclusion. At issue was, among other things, the fact the subsidiary had not set aside enough space for environmental conservation in forest it was converting to oil palm plantations.Meanwhile, POSCO subsidiary Daewoo owned 85% of Indonesian plantation company PT Bio Inti Agrindo, which was converting tropical forest into oil palm plantations in the province of West Papua, Indonesia, the council said in a letter.“The scale of conversion and the fact that the concession area lies in a region of unusually rich and unique biodiversity entails an obvious risk that conversion will cause severe environmental damage,” it said.The council said that the lack of data reinforced this risk further.NBIM has previously been criticised for its holdings in POSCO and last year pension provider KLP also excluded POSCO from its portfolio.
The inaugural pension fund stress tests carried out by EIOPA were a valuable exercise, according to the Actuarial Association of Europe (AAE). It has come out in support of the development of a common, market-sensitive methodology but disagrees with the blanket use of the risk-free discount rate.The European Insurance and Occupational Authority (EIOPA) released the results of the stress tests last Tuesday.One of the main achievements of the stress tests, according to the AAE, is their being able to show the effect, in addition to the expectation, of adverse scenarios. It said the results were unsurprising given the magnitude of the financial shocks specified by EIOPA, showing that the deficit in defined benefit (DB) schemes would increase significantly if these shocks materialised, especially on the basis of the common methodology adopted by EIOPA.However, AAE chief executive Ad Kok said the stress tests raised important questions about how the various pension stakeholders would be affected should further stresses occur in reality.“Who would take the burden?” he asked. “Who would take a financial loss? Would it be the sponsoring company, having to increase contributions? Would it be the retirees, taking reduced pensions?“Those are the relevant questions.”Under EIOPA’s second adverse scenario, incorporating sharp asset prices falls and a commodity “negative supply shock”, occupational pension funds would face a €773bn deficit on the basis of the supervisory authority’s common methodology.The AAE also noted that EIOPA did not consider that DB funds posed a systemic risk to the EU, “although it is clear increased contributions and/or reduced benefits would have some impact on the economy of member states where these arose”.Speaking upon the release of the stress test results, EIOPA chairman Gabriel Bernardino said it was too early for it to draw definitive conclusions about the potential financial-stability impact of occupational pension funds and that more work needed to be done on this.Falco Valkenburg, chairperson on the AAE pensions committee, said EIOPA was also planning to continue to work on its common methodology, and that the AAE supported this.“It is very important to get to grips with all the building blocks of a pension deal between an employer and the employees, including how it is financed,” he told IPE. “And that is exactly what this methodology is trying to achieve.”However, the AAE disagrees with how it has been implemented so far, namely via the use of a risk-free discount rate for valuing liabilities, added Valkenburg.“A risk-free rate is fine for fully guaranteed pension contracts, but some have conditions, and, in those cases, the risk-free rate inflates liabilities and hence deficits,” he said. “That’s the technical problem we have, but it is all part of the further work to be done.”In addition to trying to improve the valuation methodology, Valkenburg said it would be worthwhile to work on more forward-looking methods.Philip Shier, chairperson at the AAE, said “appropriate” stress tests could help agree a pension deal by providing “a common understanding of the risks inherent in the pension scheme, and agreement as to how these should be managed”.DB occupational pension funds should undertake their own stress tests as part of their risk assessment, added Shier, “reflecting their specific features”.He flagged the likelihood of risk assessments becoming mandatory under the revised IORP Directive, which is still to be debated in trialogue.
As projected in WTW’s ‘German Pension Finance Watch’ for February, capital-market gains and an increase in the discount rate calculated under IAS19 helped improve funding levels at corporate schemes. It said the contributions made by companies, however, were of significance given that, under German law, pension obligations do not need to be fully funded, but rather can be based on on-book cashflow projections.This is possible because the insolvency protection is not based on full funding but on contributions to the Pensions-Sicherungs-Verein pension protection fund.At Mercer Germany, chief actuary Thomas Hagemann also pointed out that “German companies are free to decide whether to create pension assets, and, within the DAX, we can find the full spectrum – from full funding to not accruing plan assets at all.”He said the DAX average-funding rate was therefore a bit misleading, as Deutsche Bank, for example, has a 101% funding level, while real estate company Vonovia’s is 4%.But, according to WTW’s Jasper, German companies have “various incentives” to continue to increase funding.“One of them is aligning the pension liabilities with the pension assets, as it is difficult to have an LDI strategy when the assets are bound in machinery and office infrastructure,” he said.He also argued that capital-market “overreactions”, particularly in the wake of the financial crisis, could push some companies further towards funding.“Most analysts and rating agencies, meanwhile, have grasped the difference between Germany and the rest of the world in pension-plan funding levels.“But, at a first glance, a higher funding level still looks better.”Both consultancies agree there is a greater need for German companies in general to make themselves attractive as employers via good pension offerings.At Mercer, Hagemann pointed out that companies would have to come up with “creative solutions and good ways to communicate risks in the pension plans to their employees to be able to win and hold specialists”. Companies on Germany’s DAX stock exchange made around €10bn in pension-fund contributions in 2015, roughly the same amount they set aside in 2014.According to research by Willis Towers Watson (WTW), car-maker Daimler made the largest contribution at €1.9bn, increasing its funding level by 1200 basis points to 71%, while Energy giant RWE set aside €1.6bn, raising its funding level by 800 bps to 77%.Thomas Jasper, head of retirement solutions at WTW Germany, told IPE: “This shows German companies are faring well enough to be able to set aside more than €10bn towards their pension plans.”DAX companies’ average funding level increased by around 400bps last year to 65%, its second-highest level recorded after it reached 71% just before the financial crisis in 2007.
A further 5% can be invested in corporate debt from companies outside the OECD, as long as it is denominated in euros.The income fund, currently €4.9bn and to be split among as many as eight managers in future, will also be permitted to invest in assets rated higher than BB+, with an upper limit of 9% on assets rated BB+ and BB-, investing in multi-asset total-return strategies.The smallest of the three tenders, the €575m growth fund, could be divided among up to three managers, limiting annual volatility to 8% while invested in multi-asset strategies.As with the other two funds, managers will not be limited in their exposure to assets rated better than BB+, but Cometa will impose a 12% hard cap on assets rated between BB+ and BB-.Both the income and growth fund should limit corporate bond exposure to countries based in OECD countries to 40%, while no more than 12% of the income fund’s assets should be invested in sovereign or government-backed bonds issued by countries outside of the OECD.The income fund will be allowed to invest up to 40% in equities from OECD countries, with a 5% upper limit on listed equities from outside the OECD.The growth fund has a higher, 70% limit on equities, with an allowance of up to 10% invested in equities listed outside the OECD. Additionally, bonds from issuers outside the OECD must be denominated in US dollars or euros.Managers have until 4 May to respond to the request for proposals. Fondo Pensione Cometa has launched a tender process to appoint up to 14 asset managers to mandates worth €8.3bn as part of a shift towards active management.Italy’s largest industry-wide pension fund, covering the metal and mechanical engineering sectors, launched the requests for proposals covering its monetary plus, income and growth portfolios, having previously announced its intention to re-tender most of its €9.6bn portfolio. The monetary plus fund, currently worth €2.8bn, will be tendered out to at least two but up to three managers, which will be expected to maximise return while keeping annual volatility below 1%, and without investing in equities. Asset managers will be expected to limit investments to bonds rated above BB+, and will be able to invest up to 30% in corporate bonds issued by companies in OECD member states.
Nestlé has stripped its internal asset managers of a number of mandates as part of a major international overhaul of its investment operations.BlackRock has taken over management, on an interim basis, of at least seven funds listed in Ireland, which are run for Nestlé’s pension funds around the world.A spokesperson for Nestlé in Switzerland confirmed to IPE: “It’s a global decision which impacts our colleagues here in Switzerland and the ones based in UK.”A source for Nestlé in Germany told IPE one of its Spezialfonds has had to source a new manager. However, most of Nestlé’s German pension assets were already managed externally, the source added. Nestlé Capital Management (NCM), based in York, UK, was founded in 2006. NCM and Nestlé Capital Advisers (NCA), based in Vevey, Switzerland, employ a number of internal investment experts.In a statement issued to the media, the Nestlé spokesperson said: “I can confirm that we are continuously exploring ways in which our company can operate sustainably in a highly competitive business environment.“Nestlé is thus strengthening its pension management strategy by changing its central pension organisation. The aim is to manage risk more effectively, strengthen governance, continue to align with industry best practices, and reduce operational costs.“This change in Nestlé’s pension organisation will also promote a more collaborative working relationship between our company and local market pension funds. We can confirm that BlackRock Advisors (UK) Limited will be acting as interim investment manager.”Nestlé has CHF23bn (€21bn) in pension assets across the countries in which it operates. Many of its branches have separate pension entities.According to the company’s 2016 full-year report, NCM was managing CHF10.4bn at year-end, almost unchanged compared to 2015 (CHF10.8bn). External managers ran most of the remaining assets, including the majority of investments for the Pensionsfonds and Pensionskasse in Germany.The spokesperson said the company would not disclose the amount Blackrock has taken under management.Nestlé’s Irish funds are branded as Robusta Asset Management. Effective 3 May, BlackRock took over funds covering active and passive European equities, and active North American equities, according to notices posted on the Irish stock exchange.BlackRock also took responsibility for Robusta’s Global Bond, Asia Pacific Equity, Global Inflation-Linked Bond, and Emerging Market Debt funds on the same date.In addition, US-based Grosvenor Capital Management has taken over from NCM and NCA as manager of Robusta’s Multistrategy Fund of Hedge Funds, according to a statement to the stock exchange on 4 January 2017.Duncan Sanford, who led the UK operations as CEO and CIO, is understood to have left NCM effective 3 May 2017, the same day BlackRock officially took over from NCM and NCA as manager of the Robusta funds.Sanford became inactive on the UK regulator’s register of authorised financial professionals on 3 May.Jayne Atkinson, previously investment manager for Nestlé’s UK pension fund, left the company earlier this year. She is now CIO for Unilever’s UK pension fund.In 2015, Nestlé created a cross-border pension solution by integrating its Austrian pension plan into the German Pensionsfonds. However, in the same year, authorities rejected a similar solution for Nestlé’s Belgian and Dutch pension plans.
Joshua Kendall, Insight Investment“Last year I wished for the green bond market to move beyond the concentration of issuance from governments, financials and utilities. Diversity has increased, with the telecommunication sector now part of the market through household names such as Verizon, Vodafone and Telefonica.“We also saw evolution in the types of impact bonds available. Notable here was Enel’s ‘transition’ bond, which could pave the way for issuance from petroleum companies in 2020. Whilst the growth overall has been positive, we have found the credentials of some of the issuance to be less than convincing.”Investor organisations/NGOsFiona Reynolds, CEO, Principles for Responsible InvestmentLast year Reynolds wished for investors to “step up on climate action” and this month she says she would have the same wish for 2020.“Whilst there has definitely been more climate action from the investment community and gains have been made through programmes that PRI is involved in such as Climate Action 100+ and the Investor Agenda, there is still so much more to be done. Emissions are higher than at any other time in the planet’s history, COP 25 was a disappointment and the anti-climate lobbyists are winning the day – ambition is spoken about but the action doesn’t meet the words.”For the investment community the initiative I am most proud of this year is the Net Zero Asset Owner Alliance. If we can get all major funds to commit to a net zero target this will be a game changer.”Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change“A number of actors have raised their ambition on climate change during 2019. Companies are setting net zero emission targets at a remarkable rate, helped by engagement through Climate Action 100+. With over 60 of our members, we are working on how to align investment portfolios with the goals of the Paris Agreement. 70 countries and the EU are working to achieve climate neutrality by 2050.“Companies are setting net zero emission targets at a remarkable rate, helped by engagement through Climate Action 100+”Stephanie Pfeifer, CEO, IIGCC “This momentum is significant, but not sufficient. Ahead of COP26 in Glasgow, we need to see even greater ambition and bolder action in putting the global economy on a path to carbon neutrality.” Catherine Howarth, ShareActionCatherine Howarth, CEO, ShareAction“My wish for 2019 was that the impacts of investments would be recognised as relevant to meeting fiduciary duties. Well, it hasn’t quite come true! That said, 2019 witnessed the growing profile of so-called impact investing and also saw mainstream investors like pension funds asking far better questions about the impacts, both positive and negative, generated by companies in their portfolios.“My wish for 2020 remains the same. Here’s hoping every pension fund seeks to calculate and improve its impact-adjusted returns for the benefit of its members.” Christina Olivecrona, AP2“A global carbon tax is still very far away. This is sad, as it would create enormous momentum for the transition to a low carbon economy. Progress is on the way and especially the EU is moving fast. An example is the carbon border adjustment mechanism in the Green Deal, which is designed to ensure that the price of imports reflects the products’ carbon content. This is a step towards a global price!”“Our ability to improve in this area hangs on the quality of data”Nico Aspinall, CIO of The People’s PensionNico Aspinall, chief investment officer of The People’s Pension, an £8bn (€9.4bn) UK multi-employer pension provider“My 2019 wish to have mandatory Taskforce for Climate-related Financial Disclosures remains. If investment managers are to get better at investing responsibly it is imperative that we have necessary data from every stock market in the world – as much information from as many companies as possible. Our ability to improve in this area hangs on the quality of data.”Greg Haenni, CIO of CPEG, the CHF13.7bn (€12.6bn) public pension fund for Geneva“Disagreement amongst providers – different ratings for the same company – shows that ESG data remains unreliable. Much of the reporting today is either voluntary or if required by legislation not standardised, which leads to challenges when making comparisons. Also, factors such as carbon intensity vary within sectors, while measures can be volatile over time.“Going forward, we expect a better alignment across companies, sectors and regions between financial and non-financial data.”David Russell, head of responsible investment at the £70.1bn Universities Superannuation Scheme David Russell, USS“My wish was that pension fund consultants would more proactively address climate change. While it has risen up the agenda, there is still a long way to go.“2020 will see a push from both pension funds and regulators that will change how the industry as a whole reports on ESG. The past has been marked by the reporting of processes, but we want outcomes, i.e. less telling us that meetings took place and more telling us what happened as a result of them.”Asset managersClaudia Kruse, managing director, responsible investment and governance at APGLast December Kruse called for consideration of the social aspects of climate change, and for end-investors to be able to express their sustainability preferences in addition to their financial preferences. Looking back she says both of these topics were in focus in 2019.“The litmus test will be what difference this makes in the real economy”Claudia Kruse, managing director, responsible investment and governance at APG“For example, South Africa developed a Just Transition Plan and the EU has announced a Just Transition Fund. Individual pension funds like ABP committed to investing into the transition, and 159 global investors representing $10.1trn in assets now endorse the Investor Statement on a Just Transition. While demand for ESG investments is rising, the decision on how to include clients’ ESG preferences in the suitability assessment and eventual product recommendations under the EU Sustainable Finance Action Plan has yet to be finalised.“All in all, there has been progress and the litmus test will be what difference this makes in the real economy.”Joshua Kendall, senior ESG analyst at Insight Investment This month also brought the unveiling of the Commission’s economic growth strategy – the European Green Deal – and EU endorsement of the 2050 climate neutrality goal, plus the United Nation’s climate change conference in Madrid, where it was decided to postpone to next year discussions on issues such as trading of emissions reductions between countries.How does 2019 stack up compared with the wishes expressed by investors this time one year ago? Read on to find out.Asset ownersCarine Smith Ihenacho, chief corporate governance officer at NBIM, manager of Europe’s largest sovereign wealth fundLast year NBIM’s Ihenacho emphasised the need for “standardised, concrete and relevant sustainability data”. This year she says:“We have looked at companies’ reporting on issues like climate risk since 2010. We saw some improvements in 2019, but there are large variations between companies and sectors. With investments in 9,000 companies across the globe, I remain hopeful that my wish is gradually coming true. As a long-term investor we support the companies in their journey to report more standardised, concrete and relevant sustainability data.”Christina Olivecrona, senior sustainability analyst at SEK334bn (€34bn) pension buffer fund AP2 Last December IPE asked various individuals in and around the world of institutional investment what their single biggest wish would be for the responsible investment industry/movement for 2019. This year, we asked them to revisit that wish: did it come true?Almost all of those who participated in this exercise last year responded to IPE’s new invitation. Generally, it seems 2019 has not delivered on their hopes, although several participants highlight momentum and progress. Still, the need for improvements in the availability and usefulness of data is one theme that emerges from the comments.It’s been a busy year in sustainable finance and it closes very much in this vein, in particular with a rush of developments linked to the European Commission’s action plan.These include the Council and European Parliament this week reaching a political agreement on the taxonomy and the European supervisory authorities delivering their advice to the Commission relating to “undue short-termism”. ESMA, for example, encouraged the Commission to set its sights on the achievement of a unified set of international environmental, social and corporate governance disclosure standards.
However, the IFoA said it recognised that all organisations were facing cash flow difficulties, and that it was therefore “happy” to pay one twelfth of its subscription each month for the six months from June if the AAE formally requested it to do so.At the same time, Stott wrote that “I would respectfully ask that given the current discussions” any interest charge payable for late contributions be waived.According to the letter, the IFoA’s proposal would see it paying an annual subscription of €110,000.“This would have the benefit of better aligning the level of contribution the IFoA pays to the concerns of the IFoA senior volunteers as to the perceived value of membership and would not require a major rewrite of the AAE statues at this time,” Stott wrote.“It also has the benefit of giving time for the UK’s currently uncertain future relationship with the EU to be determined,” he added.According to the IFoA’s letter, Brexit meant that the IFoA’s ability to play a leadership role “interacting with EU institutions” was limited.MRA problemThe letter also mentions that, “due to a legal challenge in the UK”, the IFoA would be unable to participate in a mutual recognition agreement (MRA).MRAs are arrangements by which the IFoA and other actuarial bodies recognise each other’s professional qualifications.Last year the IFoA launched a new curriculum and, according to its website, following the curriculum’s introduction all MRAs other than that with the AAE are temporarily suspended.According to Stott’s letter, the IFoA’s proposal was that it continued to be a full member of the AAE, “but recognising that in certain areas we would inevitably take more of a back seat”.Stott wrote that this was “not to say we would oppose the core principles underlying the AAE, but, just like many other AAE members, our focus would be particularly strong in one area, i.e. we do wish to continue with the valued level of engagement in research and thought leadership with the other European actuarial bodies, through the AAE”.“The IFoA confirm that they would like to stay as a full member of the AAE”Falco Valkenburg, AAE chairperson Asked about the contents of the IFoA letter, Falco Valkenburg, AAE chairperson, told IPE: “The vision of the AAE is for actuaries throughout Europe to be recognised as the leading quantitative professional advisers in financial services, risk management and social protection, contributing to the well-being of society, and for European institutions to recognise the valuable role that the AAE plays as a leading source of advice on actuarial and related issues.“The AAE will continue on this road,” he said. “The IFoA, as a founding member, have been strong partners in formulating our vision. The IFoA confirm that they would like to stay as a full member of the AAE.”According to an agenda document for Friday’s extraordinary meeting, the meeting will include the IFoA explaining its proposal and providing background, with the AAE board then to present its point of view and representatives of the member associations to have an opportunity to react to the IFoA proposal and ask questions.The subsequent agenda item is to agree a clear mandate for the AAE board in further discussions with the IFoA.In response to a request for confirmation and further questions from IPE, a spokesperson for the IFoA said: “The IFoA can confirm that for some time we have been in discussions with the AAE about the implications of the UK’s exit from the EU for the IFoA’s future relationship with the AAE. Until the outcome of those discussions with the AAE is reached, it would not be appropriate for us to comment further.”To read the digital edition of IPE’s latest magazine click here. The Actuarial Association of Europe (AAE) and its members will this Friday review a subscriptions proposal from the Institute and Faculty of Actuaries (IFoA), rejection of which the latter has said would likely see it withdrawing from the association and entering into a memorandum of understanding, if the AAE were willing.The Institute’s proposal is for a change to the AAE’s statutes to introduce a cap – of 5,500 – on the number of members upon which annual subscriptions are based.According to a late May letter from the IFoA to the AAE that was seen by IPE, if the IFoA’s proposal were not approved, “a likely consequence” would be the IFoA withdrawing from the AAE and entering into a research and thought leadership memorandum of understanding with it, although this was not the IFoA’s preferred approach.Signed by Grahame Stott, chair of the IFoA management board, the letter also reveals the IFoA had not paid its full subscriptions to the AAE for 2020/21, with the Institute saying it wanted to hear from the AAE about its proposals before making any payment.
Denmark’s Danica Pension reported investment losses on its market-rate pensions in the first half, with customers with medium-risk profiles taking a 4.3% hit to their pension pots – but the provider’s chief executive officer described the negative returns as satisfactory given first quarter asset value lows.Total assets of the Danske Bank subsidiary fell to DKK429bn (€57.6bn) by the end of June from DKK435bn the same time last year, while its pretax profit for the first half rose to DKK892m from DKK766m – a 16.5% improvement the firm said was mainly due to a reduced deficit on the health and accident business.Ole Krogh Petersen, Danica Pension CEO, said: “Considering how turbulent and unusual the first half was, I am pleased with the results we produced for our customers and for Danica Pension.”In the interim report published today, the pension fund said the 4.3% loss on its Danica Balance Mix product, for someone with 20 years to retirement and a medium-risk profile, was “satisfactory,” in light of the fact the loss for such a individual had stood at 15% at the end of March. Krogh Petersen said it was naturally frustrating that Danica’s customers had negative returns, but that the firm was pleased to have recovered a large part of the loss by maintaining its investment strategy.“In 2020, it has been particularly important to keep in mind that pensions are a long game, and I am happy to note that we have consistently been guided by this principle,” he said.After a charge for additional provisions, the return for the traditional average-rate pension scheme was -1% in the first half, down from 1.6% in the same period last year, according to the interim data.Green investments nearly doubled in the first six months of 2020 to DKK19.6bn, Danica said, from DKK10.3bn at the end of 2019.“This means that we are well underway to meeting our target of investing DKK30bn in the green transition by 2023, DKK50bn by 2025 and DKK100bn by 2030,” the firm said.Looking for IPE’s latest magazine? Read the digital edition here.
1/44A Hubert St, South Townsville.CITY fringe suburbs near the under-construction North Queensland stadium are experiencing price growth and homes are selling quicker as the project progresses.According to the latest Core Logic figures median prices have increased in South Townsville, Railway Estate and West End while all properties in all three suburbs are selling much quicker than the Townsville average of 63 days.Agents are reporting that as the stadium begins to take shape, it’s driving interest in the surrounding homes and house hunters are wanting to buy within walking distance. Explore Property sales associate Annette Rowlings specialises in Townsville’s city fringe suburbs and said the project was driving buyer interest and sales.More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020“People are starting to realise that the stadium is coming to fruition and number at open houses have increased over the last 12 months,” she said. “We are usually getting multiple bidders at auctions and we’re also getting properties selling prior to auction.“Those areas around the stadium have definitely become more desirable because buyers know more infrastructure is coming once the stadium is built.”In South Townsville CoreLogic figures show that in the three months up until April 2018 the median house price has risen 1.5 per cent to $345,000 while units have gone up 9.6 per cent to $307,000. During the same period prices in Railway Estate have gone up 4.11 per cent and are taking an average of 34 days to sell while in West End median house prices grew 4.5 per cent in the last 12 months and are taking 53 days to sell.Ray White Julie Mahoney owner Julie Mahoney recently sold a three bedroom home at 1/44A Hubert St in South Townsville in 11 days for $360,000.She said buyers were not just wanting to buy in suburbs like South Townsville and Railway Estate for the stadium, but the likely future development it would bring.“We’ve noticed in South Townsville young buyers are looking around the stadium but it’s not solely about the stadium but the continued infrastructure it will bring and the potential for capital growth,” Ms Mahoney said.“There has been some movement in units as well. We’ve sold five units in Railway Estate in very quick succession and that would indicate there is interest in and around that area.