Nuveen, one of the largest global asset managers with over US$1.1 trillion assets under management, has launched its first locally domiciled unit trust for Australian private wealth clients – Nuveen Global Cities Real Estate Fund.
To launch the strategy in Australia, Nuveen has partnered with Commonwealth Private as an anchor investor, with CBA seeding the vehicle.
The strategy forms part of the real estate portion of Commonwealth Private’s model portfolios for its private wealth clients and will be made available to other wholesale investors in Australia with a minimum investment of AU$100,000.
Andrew Kleinig, Managing Director and Head of Australia at Nuveen, said “We are delighted with our partnership with Commonwealth Private and they have been great to work with on our first Australian unit trust.
“Over the past few years, we have made excellent progress establishing the Nuveen brand in Australia, particularly within real estate, real assets, and impact investing. We look forward to bringing our institutional-grade investment strategies to wholesale investors across Australia.”
The vehicle serves as an Australian domiciled feeder into Nuveen’s listed global cities real estate strategy which provides exposure to private commercial property in North America, Asia Pacific, and Europe across top performing sectors including industrial, built-to-rent housing, and healthcare, such as medical offices and life science facilities. The strategy provides resiliency across market cycles through selective investments into commercial real estate debt, offering a potential measure of downside and performance protection. The underlying strategy is structured as a perpetual life, non-traded real estate investment trust, with US$300m of Nuveen’s own capital invested alongside client investments.
The primary objective of the strategy is to achieve current income, diversification, and long- term capital appreciation with assets located in the top 2% of global cities that are well positioned for structural growth.
The listed real estate strategy has an innovative structure offering monthly liquidity in an otherwise illiquid asset class via a share repurchase plan, with no performance fees. As of Q1 2023, the portfolio included 495 properties with total assets valued at US$2.83 billion, a leverage ratio of 15.85%, and 98% occupancy rate.
Nuveen recently released its third EQuilibrium Global Institutional Investor Survey which revealed that professional investors are rethinking their portfolio strategies in response to changing market conditions, with a focus on managing inflation risk, investing in private markets, and seeking alternative investment options, including real estate.
“Real estate has traditionally offered investors a higher level of income, strong total returns, and lower volatility than many other asset classes, particularly in inflationary environments. With this in mind, we are confident that the industrial, housing, and healthcare parts of the real estate sector will continue to thrive,” Mr. Kleinig said.
Nuveen is the fifth largest real estate investment manager globally with sector specialists and vast expertise in property markets.
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