Aussie Super Funds Back Nuveen’s $330m US Strategy

Nuveen Real Estate has raised more than $330 million for its US Cities Retail Strategy from three Australian superannuation funds. 

It’s the largest allocation in the strategy, which was established in 2018, from the region to date. Backers includie REST, which committed $250 million to the capital raising. 

The open-ended strategy targets necessity-based neighbourhood retail properties in high-liquidity markets where consumers live and work, and where well-capitalised retailers want to expand into. 

REST head of real assets Andrew Bambrook said the superannuation fund looked for “reliable, risk-adjusted returns across market cycles” for its 2 million Australian members. 

"Our commitment to Nuveen's US Cities Retail strategy reflects our confidence in necessity-based retail as a resilient, income-generating sector that can support long-term returns for our members," Bambrook said. 

“US Cities Retail strategy offers this combination, with stable cash flows supported by essential everyday consumer spending, alongside the potential for capital growth as the portfolio scales. 

“This further diversifies our property asset class and spreads our exposure to the retail sector across different property types, categories and geographies, which we believe will improve the stability of portfolio income over time.”

Nuveen US Cities Retail Strategy portfolio manager Brian Wallick said the scale of the investments from sophisticated investors demonstrated a strong appetite for grocery-anchored neighbourhood retail. 

▲ The investment emulates a growing appetite for retail assets in Australia.

"This capital raise validates the strength of our investment thesis at a time when necessity-based retail continues to demonstrate exceptional resilience,” Wallick said. 

“Our strategy sits at the intersection of enduring consumer trends: the demand for convenience, the importance of experience in physical retail, and the fundamental need for daily essentials regardless of economic conditions.” 

The investment underscores the shift in capital toward a more experiential, necessity-based format in strong demographic markets, and toward commoditised retail in secondary locations. 

According to Nuveen, the US Cities Retail strategy’s focus would capitalise on secular tailwinds, including urbanisation, the integration of physical and digital shopping experiences, and consumers' preference for convenience.

The strategy benefits from Nuveen's broader retail platform, which manages $8 billion in assets under management, representing $17 billion in gross value across a diversified national portfolio that includes some of the country's most well-known retail assets.