The real estate manager has taken a stake in a Sydney CBD office building as it launches a new open-ended property fund to invest in Asia Pacific cities.
The new fund is aimed at institutional investors. It will buy office, retail, industrial and residential assets across 17 cities in Asia Pacific.
The TH Real Estate APAC Cities Fund is targeting a long-term return of 7-10% per annum. The manager is aiming to raise $2.8 billion over a five-year horizon.
Parent company TIAA has committed an initial co-investment of about $280 million. The fund's first asset is the 12-storey office building 183 Clarence Street in Sydney's CBD. It is currently being developed by Built.
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In Australia, the fund will look for investments in Melbourne, Brisbane, Canberra, Perth and Adelaide in addition to Sydney.
TH Real Estate managing director Louise Kavanagh said Sydney is a key investment market for the fund, experiencing healthy rental growth and prevailing demand fundamentals, making it a great addition in the portfolio.
"We will use a granular approach to stock selection, focusing on asset and submarket drivers to complement our cities-based approach, and enhance returns for our clients. Our long-term investment approach seeks strong returns through market cycles, underpinned by structural trends for long-term growth, tapping into Asia Pacific's growing economic dominance," Kavanagh said.
The fund is the fourth in TH Real Estate's global resilient cities series.
TIAA acquired 100% of TH Real Estate nearly three years ago. As a result, TH Real Estate is soon to be rebranded as Nuveen Real Estate.