Sustainability key as Nuveen bets on Italian logistics and ‘living’

Nuveen Real Estate is ready to invest €250 million in Italy in 2021, focusing on logistics and student housing in a country it describes as ‘strategic’.

The group has already invested €2 billion in Italy but it is looking for more opportunities, Mario Pellò, Nuveen RE’s Head of Italy (pictured above), told Il Sole 24 Ore, Italy’s business daily, in an interview.

The pandemic has not halted Nuveen’s expansion, he said, which has been focused on logistics and, in a broad sense, “living” including student housing. After the success of the first pan-european logistics fund the group is now launching a second dedicated fund and is hoping to finalise the acquisition of a logistics portfolio in Italy before the end of the year.

The focus is on the main arterial roads in the North of Italy but also along the A1, Italy’s main motorway, which runs southwards to Rome. Nuveen is ready to invest €120 million, but will be selective, said Pellò: “We see many logistics investments in the wrong locations or with the wrong tenant.”

The pandemic has accelerated existing trends and led to the growth of e-commerce, especially in Italy where many people discovered the joys of online shopping for the first time during lockdown.

Not all logistics assets are created equal

But it is wrong to bundle all logistics investment together, because different sectors have performed very differently this year, he said: food, pharmaceuticals and e-commerce have done well, but other sectors have suffered and there have been issues with transport and supply chains.

Student housing is seen as another growth area in Italy because of the supply/demand imbalance. Nuveen is developing one project that will open in 2022 and is close to finalising another two for a total investment of €130 million. It wants to add several more next year, each with at least 500 to 1,000 beds, focusing on seven university towns: Milan, Bologna. Florence, Rome, Turin, Padua and Pisa.

The group has very strict criteria for investing, said Pellò: the location must not be more than 30 minutes’ distance by public transport from the university and the buildings must be sustainable.

Nuveen, which is active in the multifamily residential sector in the US, hopes to introduce it to Italy next. It is exploring the idea but with caution, as there are no specialised private operators in the sector in the country at present.

Whether it is logistics, student housing or multifamily, the investment must have green credentials, Pellò said: “We are long-term investors and we intend to keep and manage these assets. If an asset is not sustainable, we will not buy it.”