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Nuveen Real Estate acquires a key logistics asset in South Korea, growing its Asia Pacific cities platform

Key points
  • Second acquisition by Nuveen Real Estate’s Asia Pacific cities platform 
  • First acquisition in Korea for Nuveen Real Estate 
  • 100% interest in a last-mile, brand new logistics facility in the Greater Seoul area
  • Fully let to Coupang and Emart 24, among the largest market players in their respective fields 
  • The Asia Pacific cities platform forms part of Nuveen Real Estate’s global resilient cities series

The Asia Pacific cities platform, managed by Nuveen Real Estate, has recently acquired a brand-new 263,000 sq ft (24,400 sq m) last-mile logistics facility in the Greater Seoul area.

“South Korea ranks as one of the most connected and technology-driven markets in Asia Pacific, with an online penetration rate of 90%,” commented Louise Kavanagh, Managing Director Asia Pacific, Nuveen Real Estate. “However, in contrast there is a comparatively low supply of logistics stock that is considered modern by global standards.

“We anticipate that the rapid expansion of e-commerce and associated third-party logistics demand in Asia Pacific, and particularly South Korea, will underpin structural resilience in the sector.”

The acquisition of the asset in Namyangju City, 20km north-east of the Seoul CBD, represents the second purchase for the open-ended Fund and Nuveen Real Estate’s first acquisition in Korea. Completed in June 2019, the last-mile logistics facility is fully let to Coupang and Emart 24, two good-quality tenants with strong credit. Both are also among the largest market players in their respective fields; e-commerce and convenience store operation.

The state-of-the-art property, which comprises dry storage combined with a portion of designated cold storage, allows for 24-hour operation and serves the north-eastern population of Seoul’s metropolitan area, equating to approximately 20% of the city’s total inhabitants.

“Seoul is one of the principal cities for investment for the fund, offering a core, liquid, transparent, highly institutional and investable market,” said Louise.

Nuveen has partnered with Sang Investment to provide investment operations and capability on the ground in Korea.

“Given the dynamics of the Korean logistics industry, this last-mile distribution centre has the potential to provide substantial rental growth driven by the country’s increasing demand for same-day delivery services,” said Sang Han, CEO at Sang Investment.

“The acquisition carries great significance as it is Nuveen Real Estate’s first transaction in Korea, so we were delighted to be able to offer our local knowledge and understanding of the complex characteristics of the market. We look forward to working closely with Nuveen in the near future to enable it to further expand and diversify its portfolio in the Korean market.”

The platform was launched in November 2018 and focuses on selected ‘future-proof’ cities across Asia Pacific. The Fund’s first acquisition in November 2018 was an office development in Sydney which, upon completion, will provide 85,000 sq ft (7,900 sq m) of commercial space.

“Principal cities of investment for the Fund are those considered secularly resilient and sustainable from both an economic and environmental perspective, helping to underpin the Fund’s robust real estate investment strategy over the long-term. Through choosing these locations, the Fund hopes to deliver attractive, risk-adjusted portfolio returns to investors,” added Louise.
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