Dutch Investor Commits $65M to Nuveen APAC Fund 

Nuveen Real Estate received a shot of additional capital for its Asia Pacific Cities strategy recently as an unnamed Dutch investor committed $65 million to the US-based company’s core strategy in the region.

In announcing the investment late last week, the $133-billion asset manager did not identify its the Dutch backer, but Netherlands pension fund managers APG and Bouwinvest each indicated to Mingtiandi that they were not the source of the funding.

Multiple requests for comment to PGGM, which manages  €268 billion ($302 billion) in funds on behalf of Netherlands pensioners, went unanswered through Sunday.

The additional funds boost total investment in Nuveen’s Asia Pacific Cities fund, which the firm launched at the end of 2018 when it was still known as TH Real Estate,  to $650 million from eight investors.

Focus on Income-Producing Assets

“We have focused on assets that offer income security and distributable income for our investors, underpinned by long-term structural growth,” said Louise Kavanagh, Nuveen Real Estate’s managing director for Asia Pacific. “We are pleased to see our strong investment performance since the inception of the vehicle.”

In March, Nuveen had committed $140 million through the Asia Pacfic Core Cities fund to purchasing a portfolio of multifamily residential assets in Japan, with sources indicating to Mingtiandi the firm had purchased the apartments in Tokyo and Osaka from PAG.

Just two months before that March deal, Nuveen had teamed up with Japan’s Kenedix and the Netherlands’ Bouwinvest to spend $224 million buying a set of seven apartment blocks in Tokyo.

In Asia Pacific, Nuveen currently manages assets across Japan, Australia and South Korea in the logistics, residential and office sectors.

In its announcement concerning the Dutch investment, the company pointed to a report earlier this month from its global research team indicating attractive returns from logistics investments despite the COVID-19 pandemic, as consumers increasingly order goods online.

Core Fund Returns 8.5%

Nuveen described the income from its Asia Pacific Core Cities strategy as resilient, with the fund delivering a one-year, gross of fee, return of 8.5 percent on a US dollar basis, and 9.7 percent before adjusting for currency exchange.

The company attributed the performance of the strategy to in part to its 99 percent average occupancy across the portfolio, with a seven-year weighted average lease expiry (WALE) period.  Nuveen also describe 70 percent of its tenants as either listed firms or having investment grade credit quality.

Making Friends on the Continent

Of the $650 million that it has raised for its core vehicle in the region, $440 million has come from European investors, according to Nuveen. Company leadership attributed its most recent fund-raising win in part to growing appetite for core Asia Pacific assets among European institutions.

“Recently, we have had robust commitment from European investors, particularly German and Swiss institutional investors interested in core investments in the APAC region,” said Gabi Stein, Nuveen’s managing director of international advisory services.

Stein, whose firm also manages a European core cities fund, explained that these money managers from the Continent are attracted both to the strength and diversity of its existing APAC portfolio, as well as to the potential for future growth.