Rest Super, one of Australia’s largest industry funds, has committed to invest up to US$250m (€217m) in the US Cities Retail Fund (USCRF), managed by Nuveen Real Estate.
The A$105bn super fund was a major participant when Nuveen Real Estate recently concluded a US$330m capital raise for USCRF, first launched in 2018.
USCRF invests in neighbourhood shopping centres in major US markets with supportive demographics and tailwinds for continued growth. It has 10 retail properties in cities including Austin, Philadelphia and San Diego, with a further five shopping strips recently secured for the portfolio.
Andrew Bambrook, Rest Super’s head of real assets – investments, said the commitment was expected to provide reliable, risk-adjusted returns across market cycles for Rest’s more than two million members.
Bambrook said: “These shopping centres are anchored by major US grocers and supermarkets. USCRF prioritises areas with large numbers of younger families, and targets locations where these families are most likely to shop for everyday needs for many years to come.
“Retail precincts that focus on consumer essentials and necessities can offer resilient, stable income streams that support long‑term returns. This sector has shown it can hold up well through different economic conditions, including downturns. They also act as important hubs for their local community, which supports steady foot traffic and therefore reliable cash flows and rental income.”
He said the commitment would also enhance diversification within Rest’s property portfolio and aimed to support the stability of whole-of-fund returns over time.
“Rest has a deep heritage with the retail industry in Australia, and our property portfolio has exposure to a number of large shopping centres around the country,” he said.
“This commitment helps ‘diversify our diversifiers’ by spreading our exposure across different retail property types, categories and geographies. We have been increasing our overseas exposure in recent years, such as our investment with STORE Capital into the ‘triple-net-lease’ real estate sector last year.”
Bambrook said he was confident USCRF offered a combination of resilience and income generation, with the potential for capital growth as the portfolio scaled. With the majority of Rest’s members decades from retirement, this investment was positioned to benefit from long‑term demographic shifts, particularly millennials entering their peak household and spending years and the continued growth of higher‑density urban communities.
“These trends underpin sustained demand for local centres that serve everyday needs, supporting the long‑term performance of the investment,” said Bambrook.
Nuveen Real Estate manages 80 retail properties across 37 markets in the US, from local strips to large urban shopping centres, with a strong focus on mixed-use neighbourhoods and suburbs.
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