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Nuveen collects $420m for debut Asia open-end vehicle – Exclusive

The manager is eyeing the acquisition of a multifamily portfolio after deploying more than half the capital raised over three investments so far.

Nuveen Real Estate has raised $420 million for its first open-end vehicle in Asia after it was introduced to the market last year, PERE can reveal.

Asia Pacific Cities platform was launched in November 2018 to invest in gateway cities across the region.

With a $2 billion equity target size, the vehicle has so far received a total of $420 million in commitments from eight European investors. More final stage investors are expected to commit “significant” capital before the end of this year, according to a source close to the situation.

Teachers Insurance and Annuity Association of America (TIAA), an American asset manager, and the parent company of Nuveen, established the vehicle with $200 million of co-investment capital, according to a release.

The vehicle is expected to generate a return of 7-10 percent per annum after tax and before fees, according to the source. PERE also understands the open-end vehicle charges only a flat fee. TIAA was charged the same way as other third-party investors.

The source told PERE that the vehicle has so far deployed more than half the equity raised over three transactions and it is planning a further investment, a multifamily portfolio, in early 2020.

Nuveen confirmed its open-end platform has just completed its third acquisition. It paid approximately $230 million for a 50 percent stake in a logistics facility called Odawara Logistics in Greater Tokyo, alongside a co-investment partner, understood to be from Korea. The property is fully-leased and generates a 5.8 percent cash-on-cash yield. Prior to this, the vehicle acquired an office asset in Sydney and a logistics asset in Seoul.

The two parties paid around $460m in total for Odawara Logistics

Louise Kavanagh, managing director, Asia Pacific at Nuveen Real Estate, told PERE that logistics continues to be an attractive asset class for the platform because the sector is backed by the rise of e-commerce and favorable demographics.

Apart from that, the platform is also seeing opportunities in Japan’s multifamily sector, as well as the south coast of Australia.

Apart from the open-end core vehicle, Nuveen has also closed its second China Outlet Mall vehicle at $630 million after raising $60 million in the second quarter this year. Launched in 2017, the vehicle corralled $550 million in a first close from three investors including Allianz Real Estate, Gaw Capital Partners and its own TIAA General Account, according to an announcement by Gaw Capital. Allianz is the largest investor in that vehicle with a 30 percent stake.