Super funds pool $285m in US alternative workplace assets

Cbus, TWUSUPER, Hostplus, and an unnamed fourth superannuation fund have invested in Nuveen’s US Cities Workplace strategy in a step towards further diversifying their allocations. 

The super funds had invested a collective US$190 million ($284 million) towards alternative workplace assets, primarily across the medical office, life science, technology R&D, and studio production sectors in American cities primed for structural and demographic growth. 

The underlying sub-sector selection would provide strong diversification for the funds’ investments strategies, Nuveen said, and hit mission-critical attributes that had proven particularly valuable through the pandemic period.

Andrew Kleinig, managing director and head of Australia at Nuveen, said the firm was “thrilled” to be growing their Australian footprint and partnerships with local institutions. 

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“For us, this is the exciting start of four new partnerships with institutions looking to generate long term income for their investees,” Kleinig said.

“Against a difficult economic background, we see fundamental opportunities in the US alternative workplace sector and look forward to sharing these with our new partners.”

The US Cities Workplace strategy sat within Nuveen’s global resilient series based on its core income strategy and long- term capital growth potential. 

While real estate investment trusts (REITs) were relatively well positioned in recent months for an environment of elevated inflation and low growth, office spaces, in particular, continued to face double headwinds of flexible work conditions and a high interest rate environment. 

In May, global commercial real estate firm JLL had noted global leasing volumes in the office sector were 18 per cent below Q1 2022 and declining across all three regions. The occupancy losses had accelerated in North America, adding to the further drive towards alternative real estate allocations in the region.