The Canada Pension Plan Investment Board is investing A$300M in Nuveen’s commingled Australian commercial real estate debt strategy.
According to a press release, the commitment, which was initiated through the pension plan’s subsidiary, CPPIB Credit Investments Inc., was made alongside investments from the Teachers Insurance and Annuity Association of America (TIAA) and Temasek.
Nuveen has now closed the commercial debt program, which raised commitments of more than A$650M. The total assets under management are expected to exceed A$1B, including capital approved for co-investments.
The strategy, which is already more than 40% deployed via committed loan investments, focuses on institutional senior and junior loans secured by prime real estate, including industrial/logistics, residential, selective retail, office and alternatives across major cities in Australia.
““Australia is one of our key markets in Asia Pacific and this transaction marks an important milestone for our credit strategy in the region,” said Raymond Chan, CPPIB’s managing director and head of APAC credit, in a press release. “The investment builds upon our extensive market research and insights from our successful investments in Australia. 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.”
Investments are also aligned to Nuveen Real Estate’s comprehensive responsible investment processes and ESG factor analysis. This includes waste reduction and energy consumption, climate risk analysis and social aspects with the ability to structure Green Loans or Sustainable Linked Loans where applicable to incentivise ESG targets on behalf of clients.
The investment comes at a time when Australian commercial real estate debt offers the potential for a compelling blend of stability, attractive yields, and strong collateral protection, all of which are increasingly important to investors concerned about global volatility.
Australia’s mature market, supported by robust economic foundations, strict regulatory requirements for banks and the need for more alternative capital sources provides a good foundation for long-term investment in this space.
The strategy will continue to focus on repeat institutional borrowers, conservative lending parameters and prime assets in sectors that benefit most from Australia’s high population growth and limited supply.
