diff --git a/packages/scene-composer/src/components/toolbars/floatingToolbar/items/AddObjectMenu.tsx b/packages/scene-composer/src/components/toolbars/floatingToolbar/items/AddObjectMenu.tsx
index 9241a2815..438b7d306 100644
--- a/packages/scene-composer/src/components/toolbars/floatingToolbar/items/AddObjectMenu.tsx
+++ b/packages/scene-composer/src/components/toolbars/floatingToolbar/items/AddObjectMenu.tsx
@@ -209,13 +209,20 @@ export const AddObjectMenu = () => {
         parentRef: getRefForParenting(),
       } as unknown as ISceneNodeInternal;
 
-      const parent = getObject3DBySceneNodeRef(node.parentRef);
+      let physicalParentNode: ISceneNodeInternal | undefined = getSceneNodeByRef(node.parentRef);
+      while (physicalParentNode && findComponentByType(physicalParentNode, KnownComponentType.SubModelRef)) {
+        physicalParentNode = getSceneNodeByRef(physicalParentNode.parentRef);
+      }
+
+      const hierarchicalParentRef = node.parentRef;
+      const parent = physicalParentNode ? getObject3DBySceneNodeRef(physicalParentNode.ref) : undefined;
       const newNode = createNodeWithTransform(
         node,
         mainCameraObject.position,
         mainCameraObject.rotation,
         mainCameraObject.scale,
         parent,
+        hierarchicalParentRef,
       );
 
       appendSceneNode(newNode);
diff --git a/packages/scene-composer/src/utils/__snapshots__/nodeUtils.spec.ts.snap b/packages/scene-composer/src/utils/__snapshots__/nodeUtils.spec.ts.snap
index 434c38ede..deb733964 100644
--- a/packages/scene-composer/src/utils/__snapshots__/nodeUtils.spec.ts.snap
+++ b/packages/scene-composer/src/utils/__snapshots__/nodeUtils.spec.ts.snap
@@ -7,6 +7,7 @@ Object {
       "type": "Camera",
     },
   ],
+  "parentRef": "parent-ref",
   "ref": "test-ref",
   "transform": Object {
     "position": Array [
@@ -35,6 +36,7 @@ Object {
       "type": "Camera",
     },
   ],
+  "parentRef": undefined,
   "ref": "test-ref",
   "transform": Object {
     "position": Array [
diff --git a/packages/scene-composer/src/utils/nodeUtils.ts b/packages/scene-composer/src/utils/nodeUtils.ts
index 4db361aaf..7388687a5 100644
--- a/packages/scene-composer/src/utils/nodeUtils.ts
+++ b/packages/scene-composer/src/utils/nodeUtils.ts
@@ -124,12 +124,14 @@ export const createNodeWithTransform = (
   rotation: THREE.Euler,
   scale: THREE.Vector3,
   parent?: THREE.Object3D,
+  targetRef?: string,
 ): ISceneNodeInternal => {
   const finalTransform = getFinalTransform({ position, rotation, scale }, parent);
 
   const node = (newWidget as AddingWidgetInfo).node ? (newWidget as AddingWidgetInfo).node : newWidget;
   return {
     ...node,
+    parentRef: targetRef || parent?.userData.nodeRef,
     transform: {
       position: finalTransform.position.toArray(),
       rotation: finalTransform.rotation.toVector3().toArray(),