Nuveen has announced the launch of its first locally domiciled unit trust for Australian private wealth clients, the Nuveen Global Cities Real Estate Fund, with Commonwealth Bank’s private banking arm seeding the vehicle.
In a statement on Friday, the firm said the fund serves as an Australian domiciled feeder into its listed global cities real estate strategy.
Namely, it provides exposure to private commercial property in North America, Asia-Pacific, and Europe across sectors including industrial, built-to-rent housing, and healthcare.
Its primary objective, Nuveen explained, is to achieve current income, diversification, and long-term capital appreciation with assets located in the top 2 per cent of global cities.
“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 firm clarified.
As of Q1 2023, the portfolio was reported to include 495 properties with total assets valued at $4.27 billion (US$2.83 billion), a leverage ratio of 15.85 per cent, and 98 per cent occupancy rate, according to the asset manager.
Nuveen also confirmed the fund will form part 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 $100,000.
“We are delighted with our partnership with Commonwealth Private and they have been great to work with on our first Australian unit trust,” commented Andrew Kleinig, managing director and head of Australia at Nuveen.
“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,” he added.
Moreover, the underlying strategy is structured as a perpetual life, non-traded real estate investment trust, with $453 million (US$300 million) of Nuveen’s own capital invested alongside client investments.
Nuveen also recently released its third EQuilibrium Global Institutional Investor Survey, which revealed investors are rethinking their portfolios 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 explained.
