The Canada Pension Plan Investment Board (CPP Investments), Australia’s federal superannuation counterpart, has become the latest overseas investor to dip into Australian commercial real estate debt via global asset manager Nuveen’s flagship strategy.
Nuveen confirmed the strategy had made its second close with over $650 million committed, including $300 million from CPP Investments through its subsidiary CPPIB Credit Investments Inc. and the remaining from fellow strategic partners, the Teachers Insurance and Annuity Association of America (TIAA) and Singapore’s Temasek.
The asset manager said Australian commercial real estate offers an attractive opportunity for overseas investors, combining “stability, attractive yields and strong collateral protection” amid ongoing market volatility. It will concentrate on “repeat institutional borrowers, conservative lending parameters and prime assets in sectors that benefit most from Australia’s high population growth and limited supply”, according to Nuveen.
“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,” Raymond Chan, Managing Director & Head of APAC Credit at CPP Investments, 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.
“These opportunities offer stability and attractive yields amid global volatility, contributing to long-term returns for the CPP Fund.”
Led by Dugald Marr, Nuveen’s Head of Debt Australia and New Zealand, the strategy jumps off from Nuveen Real Estate’s established global debt platform and leverages a track record of performance and a wealth of experience among 55 specialists and 60 team members based in Asia.
The strategy – which has already been 40 per cent deployed through committed institutional senior and junior loan investments – favours the industrial, logistics and residential real estate sectors, with conditional allowances made in the retail, office and alternatives spaces.
As an offshoot of Nuveen Real Estate’s existing platform, the strategy also applies an additional responsible investment and environmental, social and governance (ESG) screening process to its investments, including waste reduction, energy consumption, climate risk analysis and social aspects.
“This is another milestone for the strategy. With CPP Investments’ commitment, we will continue our focus on strategic, in-depth partnerships with the highest calibre of investors,” Andrew Kleinig, Head of Australia and the Global Client Group for South East Asia at Nuveen, said.
“We are excited to work with a like-minded partner who also shares a high conviction on the asset class. CPP Investments has provided significant value-add as a strategic investor, ensuring long-term success and growth of the partnership.
“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.”
