Andrew Kleinig

Nuveen, one of the largest asset managers globally with over US$1.3 trillion AUM*, has reached second close of its commingled Australian commercial real estate debt strategy with commitments of over A$650 million.

Canada Pension Plan Investment Board (CPP Investments), through its subsidiary CPPIB Credit Investments Inc., invested A$300 million, joining Teachers Insurance and Annuity Association of America (TIAA) and Temasek as strategic partners of Nuveen for this strategy. Total AUM are expected to exceed A$1 billion including capital approved for co-investments.

The strategy is already more than 40% deployed via committed loan investments focusing on institutional senior and junior loans secured by prime real estate in Australia. Preferred sectors for the strategy are industrial / logistics and residential, with a selective approach to retail, office and alternatives across major cities in Australia.

The strategy leverages both Nuveen Real Estate’s global debt platform, which currently has over 55 dedicated specialists, and the team of more than 60 at Nuveen Real Estate in Asia. The strategy is led by Dugald Marr, Nuveen’s Head of Debt Australia and New Zealand, and the support of an experienced team with a long track record of originating and structuring high-quality loan investments in this market.

Investments are also aligned to Nuveen Real Estate’s comprehensive responsible investment processes and ESG factor analysis. This includes waste reduction and energy consumption, climate risk analysis and social aspects with the ability to structure Green Loans or Sustainable Linked Loans where applicable to incentivise ESG targets on behalf of clients.

The investment comes at a time when Australian commercial real estate debt offers the potential for a compelling blend of stability, attractive yields, and strong collateral protection, all of which are increasingly important to investors concerned about global volatility.

Australia’s mature market, supported by robust economic foundations, strict regulatory requirements for banks and the need for more alternative capital sources provides a good foundation for long-term investment in this space.

The strategy will continue to focus on repeat institutional borrowers, conservative lending parameters and prime assets in sectors that benefit most from Australia’s high population growth and limited supply.

Andrew Kleinig, Head of Australia and the Global Client Group for South East Asia at Nuveen, said: “This is another milestone for the strategy. With CPP Investments’ commitment, we will continue our focus on strategic, in-depth partnerships with the highest calibre of investors. We are excited to work with a like-minded partner who also shares a high conviction on the asset class. CPP Investments has provided significant value-add as a strategic investor, ensuring long-term success and growth of the partnership. It showcases Nuveen’s pedigree in real estate investment and our ability to bring regionally tailored solutions across both equity and debt platforms. We believe Nuveen’s offering across real assets more broadly is well-positioned to help clients across Asia navigate volatility alongside managing their responsible investment goals.”

Raymond Chan, Managing Director & Head of APAC Credit at CPP Investments, said: “Australia is one of our key markets in Asia Pacific and this transaction marks an important milestone for our credit strategy in the region. The investment builds upon our extensive market research and insights from our successful investments in Australia. Leveraging Nuveen’s strong local network and capabilities, this partnership enables us to tap into attractive real estate debt investments in Australia and further augment our credit program in the region. These opportunities offer stability and attractive yields amid global volatility, contributing to long-term returns for the CPP Fund.”

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Dugald Marr

Nuveen, one of the largest asset managers with over $1.2tn AUM, has closed its first commingled Australian commercial real estate debt strategy with anchor investments of over AU$400M from the Teachers Insurance and Annuity Association of America (TIAA) and Temasek, a global investment company headquartered in Singapore. These commitments are expected to grow via additional investments from other global investors who are currently progressing due diligence.

The strategy is focussing on institutional senior and junior secured real estate loan investments in Australia. It primarily will look to the industrial, logistics and residential sectors, with a selective approach to retail, office and alternatives across major cities in Australia.

The strategy leverages both Nuveen Real Estate’s global debt platform, which currently has over 55 dedicated specialists, and the 60+ team at Nuveen Real Estate in Asia. The strategy is led by Dugald Marr, Head of Debt Australia & New Zealand, together with an experienced team who have a long track record of originating and structuring high-quality loan investments in this market. The team has already secured a large seed loan portfolio and pipeline with the backing of TIAA for the benefit of current and future investors.

Investments will also be influenced and aligned to Nuveen Real Estate’s comprehensive responsible investment processes and ESG factor analysis. This includes waste reduction and energy consumption, climate risk analysis and social aspects with the ability to structure Green Loans or Sustainable Linked Loans where applicable to incentivise ESG targets on behalf of its clients.

Dugald Marr, Head of Debt – Australia at Nuveen Real Estate, said: “We believe investment in Australian commercial real estate debt offers investors a compelling blend of stability, attractive yields and strong collateral protection.”

“Australia’s mature market, supported by robust economic foundations, strict regulatory requirements for banks and the need for more alternative capital sources provides a good foundation for long-term investment in this space. Our focus is institutional borrowers, conservative lending parameters and prime assets or projects in sectors that benefit most from Australia’s high population growth and limited supply.

Those market fundamentals and strategy, coupled with Nuveen Real Estate’s extensive real estate debt platform, presents an enticing opportunity for institutions to diversify their portfolios whilst looking to achieve stable returns. Through continued partnerships with like-minded clients, we are excited to continue taking advantage of opportunities in Australasia and beyond.”

Gracee Teo, Head of South East Asia Institutional at Nuveen, said: “This milestone for the strategy, and partnership with such high calibre investors in the region, truly showcases Nuveen’s pedigree in real estate investment and our ability to bring regionally tailored solutions across both equity and debt platforms. We believe Nuveen’s offering across real assets more broadly is well-positioned to help clients across Asia navigate volatility alongside managing their responsible investment goals.”

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