Louise Kavanagh, CIO & Head of Fund Management APAC for Nuveen Real Estate, comments: “Singapore is a key gateway city for the Asia Pacific Cities strategy and the acquisition of One George Street will anchor the portfolio in a financially robust and attractive market and sector, complementing the current allocation to logistics and multifamily.”
“The premium office space sector will remain relevant post-pandemic as we see ongoing demand for office space, coupled with the limited Grade A supply supporting office rental growth in the near term. The strong in place tenant covenants and strategic location should provide stable income t0 our investors over time.”
Ms Lim Lay Wah, Group Head of Financial Institutions Group, UOB, says: "UOB is proud to support Nuveen in their joint acquisition of One George Street, a Grade A office asset in Singapore, which has been awarded Green Mark GoldPlus certification by the Building and Construction Authority. Nuveen's focus on investing responsibly to drive superior outcomes for its investors and the community is very much in line with UOB's commitment to forging a sustainable future for all. With rising demand for sustainability-focused investments by institutional investors, we are keen to work with like-minded partners to explore opportunities and to develop mutually-beneficial relationships."
Nuveen research has found the office market in Singapore is two-tier market with occupiers showing stronger preference for prime office buildings with tech-enabled specifications over the ageing office stock with older specifications. The resilience in the Grade A office market is reflected in the vacancy rate of 3.9% which limits the availability of prime space for occupiers with upcoming lease expiries leading to potential positive rental growth. The research also found traditional sectors of banking, legal and accounting will remain key growth industries supported by the growing sectors such as the technology, financial services and professional services.
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The acquisition presents the fourteenth asset for the strategy, which already owns a portfolio of multifamily properties in Japan, an office asset in Sydney and three logistics facilities in Greater Tokyo and Seoul. The platform continues to be well-received by the institutional investor community, with further commitments confirmed in August bringing the total raised in the calendar year 2021 to in excess of US$250 million. This latest acquisition brings the portfolio’s total AUM to over US$1.2 billion.
“Having raised over US$925 million since launch in November 2018, we will be looking to maintain our current pace of acquisitions, seeking durable income and capital appreciation from a balanced and diversified portfolio of real estate investments,” adds Kavanagh.
Photo credit: CapitaLand Integrated Commercial Trust
