Nuveen Real Estate acquires US$122M logistics asset in South Korea, further expanding its Asia Pacific Cities portfolio

The Asia Pacific Cities strategy managed by Nuveen Real Estate, one of the largest investment managers globally, has recently acquired a new 84,300 sq m (c. 907,000 sq ft) last-mile logistics asset for $122 million (₩145 billion) in the Greater Seoul area. The deal was sourced off-market through Nuveen’s Seoul-based partners Sang Investments.

“South Korea is one of the biggest e-commerce markets globally, and the sector has seen a further expansion due to Covid-19. This in turn facilitates greater demand for third-party modern logistics in South Korea. We see an opportunity in ‘last-mile’ delivery, particularly in the Greater Seoul area where the southern population is under-served.” commented Louise Kavanagh, Managing Director Asia Pacific, Nuveen Real Estate.

The acquisition of the new logistics asset is the fifth purchase for the firm’s Asia Pacific Cities platform and its second in South Korea. The facility is strategically situated 20-minutes south of Gangnam, which is Seoul’s most prestigious residential area and second biggest business district. It is located in the Uiwang Techno Park complex, a government-driven project for industrial and logistics use, that is surrounded by inland container depot (ICD) terminals, and is the only ICD in Greater Seoul area covering 80% of total containers within the area. The prime location, together with the limited number of government-issued logistics permits close to Seoul, provides the asset with a competitive advantage.

The seven-storey facility has direct access to a vast infrastructure network, including expressways, railroads and two arterial roads – Bugok IC and Shin Bugok IC, enabling it to seamlessly serve the southern population of the Greater Seoul area. It will enable up to three rounds of delivery service per day to an area with the highest consumption ability in South Korea.

“Seoul continues to be one of the principal cities for the platform as it has an investable market that is also core, liquid, transparent and highly institutional,” added Kavanagh. Since launching, we have sought to build a foundational portfolio of diversified private real estate across resilient cities in Asia Pacific. The purchase of this high-quality asset brings the platform’s allocation to 66% to logistics, 23% to residential and 11% to office assets across four vibrant Asian cities.”

The Asia Pacific Cities strategy was launched in November 2018 and focuses on selected ‘future-proof’ cities across Asia Pacific. The vehicle is part of Nuveen Real Estate’s global resilient series, which has over US$5 billion of assets in over 35 leading resilient cities globally.

It focuses on investing in high-quality assets in ‘future-proof’ cities that are well-positioned in terms of long-term structural trends, including demographic change, urbanisation and technology and aims to delivers attractive, risk-adjusted returns to investors in doing so. Under this series, the firm also manages a European strategy, as well as four sector-specific strategies in the U.S. which are all underpinned by the same cities-focused approach.