Nuveen Taps European Investors to Raise Further $213M for $2B Core APAC Fund

Nuveen Real Estate has raised a further $213.5 million for its Asia Pacific Cities strategy, with the Chicago-based fund manager securing capital commitments from four European investors.

The platform, which focuses on high-quality assets in “future-proof cities”, has raised more than $900 million from 12 investors since its 2018 launch, aiming for $2 billion over a five-year horizon.

The latest commitment signals continued interest in Nuveen’s open-ended core APAC fund from investors in Europe, with about $680 million raised from the continent so far, the affiliate of US financial giant TIAA said Monday in a release.

“It has been heartening to witness continued investor interest, as well as the growth and strong investment performance of this flagship strategy in the last few years since its inception,” said Louise Kavanagh, managing director for Asia Pacific at Nuveen Real Estate. “With this latest commitment, we are in a strong position to look for assets offering income generation and stable distributable income, anchored on long-term structural growth.”

Weighted Towards Warehouses

Asia Pacific Cities focuses on well-positioned assets in markets that are set to benefit from long-term structural trends, including demographic change, urbanisation and technology.

The fund’s current allocation stands at 64 percent to logistics, 18 percent to residential and 18 percent to office assets across cities including Sydney, Singapore and Seoul. Nuveen’s research points to ongoing strong demand for modern logistics space in APAC, driven by e-commerce and cold storage for fresh food.

Logistics acquisitions under the fund include a 84,300 square metre last-mile facility in the Uiwang Techno Park south of Seoul for $122 million and a 24,436 square metre warehouse northeast of the South Korean capital for an undisclosed sum.

Offices Still Attractive

Despite the prevalence of industrial assets, the fund continues to look for office opportunities.

The inaugural office asset, 183-185 Clarence Street in Sydney, marked its practical completion in June. After restoration and refurbishment, the heritage development provides 7,900 square metres (85,000 square feet) of commercial space across 12 floors and is designed to meet various ESG benchmarks.

“The current investment climate continues to provide attractive entry points into the deep and liquid office sector across some resilient gateway cities backed by positive long-term fundamentals,” Kavanagh said. “The acceleration in structural trends brought about by the pandemic has even improved the corporate balance sheet performance of some financial, insurance, real estate services and tech-related sectors, in turn positioning high-quality, prime-located offices in markets such as Singapore, Seoul and Sydney for a sturdy recovery.”

Asia Pacific Cities forms part of Nuveen’s “global resilient” series, which manages more than $5 billion in assets across over 35 cities worldwide. The fund manager, known as TH Real Estate until a rebranding in early 2019, also oversees a European strategy and four sector-specific strategies in the US under the same cities-focused approach.