Nuveen reaches $650m in commitments for local RE debt strategy

The $1.3 trillion asset manager has received $300 million from the Canadian Pension Plan Investment Board (CPP Investments) for its Australian real estate debt strategy.

CPP Investments has contributed $300 million through CPPIB Credit Investments, joining Teachers Insurance and Annuity Association of America (TIAA) and Temasek.

The strategy focuses on the industrial, logistics and residential, with a selective approach to retail, office and alternatives across major cities in Australia. It has more than 40% deployed via committed loan investments.

Nuveen expects the assets under management (AUM) for the strategy to exceed $1 billion including capital approved for co-investments.

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, Nuveen said.

The strategy also includes waste reduction and energy consumption, climate risk analysis and social aspects to structure green loans or sustainable linked loans where applicable.

Nuveen head of Australia and the global client group for Southeast Asia Andrew Kleinig said with the new capital, the firm can focus on working with the "highest calibre" of investors.

"CPP Investments has provided significant value-add as a strategic investor, ensuring long-term success and growth of the partnership," Kleinig said.

"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."

Meanwhile, CPP Investments managing director and head of APAC Raymond Chan said the strategy provides the CPP Fund stability and attractive yields amid global uncertainty.

"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," Chan said.

"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."

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.