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Nuveen raises €250m for sequel European logistics vehicle

The London-based manager expects it to contain up to €800m in investments across western European markets.

After closing its inaugural pan-European, open-ended industrial vehicle in July, Nuveen Real Estate has launched a second, PERE can reveal.

The manager has raised €250 million of equity so far for the vehicle from German institutional investors – all of which had previously backed other logistics products it has offered.

Nuveen said the equity of the vehicle would ultimately be deployed into between €700 million and €800 million of investments.

“We have a couple of investors in the final stage of subscription,” Thorsten Kiel, head of European logistics, told PERE of the fundraising. “So, it is still open for more equity.”

He added that the vehicle, while open-ended in structure, has a “long-hold horizon of more than 12 years.”

On the investment strategy, he said Nuveen was targeting high-quality, modern logistics properties suited to all industrial uses. These would be located across core European markets, including Germany, France, Spain, Italy and the Netherlands.

Nuveen launched its first European logistics vehicle in 2016 through which it invested €620 million across 21 assets in various European countries.

That vehicle was fully deployed at the end of July 2020 after Nuveen made its final acquisitions, including two assets in Italy, one in Germany and another in Spain.

Kiel told PERE the return strategy of the new logistics vehicle was adjusted to match recent yield tightening.

“We fully appreciate the yield compression that the market has seen over recent years,” said Kiel. “Therefore, we have adjusted the objectives of the strategy. But we still aim to deliver above market returns to our investors.”

More broadly, Nuveen currently has €3 billion invested in European logistics, accounting for 12 percent of its European real estate assets under management, according to Timothy Horrocks, the firm’s head of continental Europe.

Horrocks said the firm is aiming to grow this logistics allocation to 15 percent over the next 18 months with the help of this latest vehicle.

On a global basis, Nuveen’s logistics portfolio represents around €15.4 billion of its assets under management, as of June 30.

In March this year, PERE learned Nuveen had reached the first close for its US Core Industrial – one of the six open-end vehicles launched last year – on $660 million. The portfolio for that vehicle comprises 45 logistics assets throughout a dozen markets, mostly in southern US states, with a combined value of $1.3 billion.