Nuveen Raises $330M For U.S. Grocery-Anchored Retail Fund
Another round of fresh capital has been poured into Nuveen's grocery-focused retail fund, the investment giant announced Tuesday.
Nuveen has raised $330M for its open-ended U.S. Cities Retail Fund, which targets necessity-based, grocery-anchored retail properties in affluent areas. Last May, Nuveen raised $320M from institutional capital for the same fund, which launched in 2018. USCRF has more than $8B in assets under management.
The capital for this round came from three Australian institutional investors and is anchored by a $250M commitment from pension fund the Retail Employees Superannuation Trust.
Brian Wallick, portfolio manager for Nuveen's U.S. cities retail strategy, said in a press release that the amount of money raised speaks to the appeal of the grocery-anchored sector for investors.
"This capital raise validates the strength of our investment thesis at a time when necessity-based retail continues to demonstrate exceptional resilience," Wallick said.
Grocery-anchored transaction volume grew to $11B last year, a 42% increase from $7B the year prior, according to JLL.
The vacancy rate for this segment is 4%, outperforming other shopping centers, which average 6.3% vacancy. Above-average performance translates into above-average rents, and grocery-anchored centers are commanding a rent premium of 4.4%.
Acquisitions are increasingly going to institutional investors, with that pool of buyers reaching 27% last year, their highest share in more than a decade, JLL found.
Large investors betting big on the sector include Bain Capital and 11North, which teamed up in December and raised $1.6B to spend on grocery-anchored assets.
MCB picked up 15 assets in 10 states when it bought private grocery-anchored retail investor Epic in January. Just under a month later, new kid on the block Town Lane acquired 27 shopping centers with grocery anchors when it purchased ShopOne Centers.
