Nuveen Real Estate’s Asia Pacific Cities strategy raises a further $65 million following vehicle’s sustained performance

Whilst some investors have looked to defer capital allocations amidst the Coronavirus pandemic, Nuveen Real Estate, one of the world’s largest investment managers, has raised an additional $65 million from a Dutch investor for its Asia Pacific Cities strategy.

Since its launch, the vehicle has raised over $650 million from eight investors, with c. $440 million of this from European investors. The Asia Pacific Cities vehicle currently owns assets across Japan, Australia and South Korea in the logistics, residential and office sectors, with a current standing weighting towards logistics.

Nuveen Real Estate’s latest research pointed to the long-term strength of the logistics sector, reporting that during the current crisis, online orders increased 82% among primarily store-based retailers in the two weeks from March 22 through April 4 2020.

The resilience of the portfolio’s income is testament to the strategy’s success to date, with occupancy levels sitting at 99% and an average 7-year weighted lease expiry (both as at March 2020). Additionally, over 70% of tenants are either listed or investment grade credit quality, offering relative security and longevity of income for investors.

The Asia Pacific Cities vehicle has been included in the ANREV Pan Asia Open End Diversified Core Fund Index (ODCI) since Q3 2019. This new index was created to measure the performance of non-listed real estate core vehicles investing in diversified private real estate in Asia Pacific. The Asia Pacific Cities strategy delivered a 1-year, gross of fee, return of 8.5% on a USD basis and 9.7% on a FX neutral basis.

Louise Kavanagh, Managing Director Asia Pacific, at Nuveen Real Estate, commented: “Having launched the Asia Pacific vehicle at the end of 2018, we have sought to build a foundational portfolio of core assets diversified across principal resilient cities. We have focused on assets that offer income security and distributable income for our investors, underpinned by long-term structural growth, and we are pleased to see our strong investment performance since the inception of the vehicle.”

Gabi Stein, Managing Director, Managing Director, International Advisory Services at Nuveen, added: “Recently, we have had robust commitment from European investors, particularly German and Swiss institutional investors, who are interested in core investments in the APAC region. Many are attracted to the strength of the existing core portfolio, diversification and the potential for further growth in the medium to long-term via positive long-term structural drivers.”

The Asia Pacific Cities vehicle forms part of the firm’s global resilient series, which 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 in doing so, possibly delivers attractive, risk-adjusted returns to investors.

As part of this series, Nuveen Real Estate 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. Across its global resilient series, the firm manages over US$5 billion of assets in over 35 leading resilient cities globally.