CBA seeds Nuveen to launch first local unit trust

Patrick Bunsci

3 July 2023

Nuveen, one of the world’s largest asset managers, has announced the launch of its first locally domiciled unit trust for private wealth clients, offering Australian investors access to its high performing global cities real estate strategy.

The Global Cities Real Estate Fund, Nuveen confirmed, provides exposure to private commercial property in North America, Asia Pacific, and Europe across the industrial, built-to-rent housing, and healthcare sectors, including medical offices and life science facilities.

The underlying strategy, the company said, is structured “as a perpetual life, non-traded real estate investment trust”.

Nuveen’s primary objective for its Global Cities strategy is to achieve current income, diversification, and long-term capital appreciation with assets located in the top 2% of global cities that “are well positioned for structural growth”.

As of Q1 2023, the portfolio included 495 properties with total assets valued at US$2.83 billion (AU$ 4.28 billion), a leverage ratio of 15.85%, and 98% occupancy rate.

“The strategy provides resiliency across market cycles through selective investments into commercial real estate debt, offering a potential measure of downside and performance protection,” Nuveen said in a statement.

The global asset manager has partnered locally with Commonwealth Private, the private wealth advisory arm of the Commonwealth Bank of Australia (CBA), which has provided an anchor investment in the fund.

The strategy forms part of the real estate portion of Commonwealth Private’s model portfolios for its private wealth clients. It is also available to other wholesale investors in Australia with a minimum investment of AU$100,000.

Nuveen said that, alongside client investments, it has invested US$300 million (AU$453.8 million) of its own capital in the fund.

“We are delighted with our partnership with Commonwealth Private and they have been great to work with on our first Australian unit trust,” said Andrew Kleinig, managing director and head of Nuveen’s Australia division.

“Over the past few years, we have made excellent progress establishing the Nuveen brand in Australia, particularly within real estate, real assets, and impact investing,” Kleinig added.

“We look forward to bringing our institutional-grade investment strategies to wholesale investors across Australia.”

Nuveen is one of the largest global asset managers with over US$1.1 trillion assets under management and, according to ANREV/INREV/NCREIF Fund Manager Survey 2022, is also the fifth largest real estate investment manager globally.