Nuveen Real Estate has made its second investment from Asia Pacific Cities Fund acquiring a last-mile logistics facility in the Greater Seoul area, marking its first deal in Korea, according to an announcement.
Financial details of the transaction were not disclosed.
The realty investor, formerly known as TH Real Estate, is an arm of asset manager Nuveen, which is owned by US pension giant TIAA. The Cities fund is a $2 billion open-ended, core property fund that focuses on select cities across the Asia Pacific region.
The firm had rolled out the Cities fund late last year. Its first investment has been made in an office in Sydney.
In Korea, it has invested in a new 263,000 sq ft (24,400 sq m) last-mile logistics facility in Namyangju City, which is 20km north-east of Seoul. Completed in June 2019, the last-mile logistics facility has been leased out to Coupang and Emart 24. Both tenants are also among the largest market players in their respective fields – e-commerce and convenience store operation.
The property serves the north-eastern population of Seoul’s metropolitan area, equating to approximately 20 per cent of the city’s total inhabitants.
South Korea ranks as one of the most connected and technology-driven markets in the Asia Pacific region, with an online penetration rate of 90 per cent, said Louise Kavanagh, Managing Director Asia Pacific, Nuveen Real Estate. However, in contrast, less than 5 per cent of its logistics stock is considered modern by global standards.
“We anticipate that the rapid expansion of e-commerce and associated third-party logistics demand in Asia Pacific, and particularly South Korea, will underpin structural resilience in the sector,” Louise added.
The Cities fund, that focuses on 17 principal and progressive cities across Asia Pacific including Tokyo, Sydney, Brisbane, Singapore and Seoul, largely invests in office, retail, industrial and residential assets. Its parent company TIAA had committed an initial co-investment of $200 million for the fund last year.
The platform follows Nuveen Real Estate’s flagship European Cities mandate, launched in 2016, which invests in income-producing properties in ‘future-proof’ cities across Europe.