Nuveen Real Estate has bought a last-mile logistics facility in South Korea’s capital for KRW145bn (€107m).

Acquisition of the new logistics asset in Seoul is the fifth purchase for the firm’s Asia-Pacific Cities platform and its second in South Korea, bringing the total value of the platform’s portfolio to almost $700m (€595m).

Louise Kavanagh, managing director Asia-Pacific of Nuveen Real Estate, said that, with the latest acquisition, the platform’s allocation was now 66% to logistics, 23% to residential and 11% to office assets, across four cities.

Seoul’s logistics sector would continue to ride the secular growth of the city’s fundamentals and, backed by favourable demographics, the rise of e-commerce, she said.

Kavanagh told IPE Real Assets that “secular headwinds” would continue to exist for retail and hospitality.

“Conversely, alternative sectors (particularly data centres, residential and last-mile delivery) were more defensive in nature during this crisis, and were “likely to outperform”.

Before COVID-19, she said, a lack of investment product had been a key challenge and remained as such.

“This will continue to increase competition in the market. Additionally, there is little sign of distress at the moment, and, with investors still in price discovery mode, many potential sellers are taking a ‘wait and see’ approach before undertaking divestment strategies.

“This will likely further temper transaction volumes this year. Travel restrictions round out the key challenges currently.”

Kavanagh said Nuveen Real Estate was sticking to core investment strategies in the region. These included Nuveen’s Asia-Pacific Cities strategy.

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