AI Drives New Investment Opportunities in Real Estate, Says Nuveen

AI Wave Set to Influence Real Estate with Strong Growth Potential: Nuveen Insights

Global investment manager Nuveen highlighted the growing influence of artificial intelligence (AI) on the real estate sector, pointing out that there is considerable opportunity for investment ahead. The company emphasized that the productivity gains seen in tech stocks have yet to materialize in real estate but are expected to do so in the near future.

Abigail Dean, Nuveen's global head of strategic insights for Real Assets, compared the current situation to the success of the "Magnificent 7" tech companies in the stock market. She noted that the innovation driven by AI has not yet been fully reflected in real assets but will likely create new investment avenues over the next several years.

Rising Demand for Digital Infrastructure

AI’s rising prominence is boosting demand for data centers and the energy infrastructure that supports them. These sectors are gaining attention due to their close connection to AI-driven growth. Chad Phillips, global head of Nuveen Real Estate, mentioned that private real estate is currently underrepresented in investor portfolios, largely due to a global market correction.

Specifically, private real estate made up only 7.6% of total investor portfolios as of June 2025, down from 10% in 2021 and 13.7% in 2022. This decline suggests an opportunity for investors to rebalance and increase allocations as markets stabilize.

Investment Outlook and Market Conditions

Market conditions are improving, making real estate investment increasingly attractive. Phillips recommends a three-to-seven-year investment horizon to capture the expected recovery. He also pointed out that restrictive immigration policies in the U.S. have constrained the construction labor supply, limiting new development projects.

With limited new supply expected over the next few years, rental growth opportunities appear promising. This balance of supply constraints and growing demand creates a favorable environment for real estate investors.

Focus on the Korean Market and Renewable Energy

Nuveen is actively expanding its investments in South Korea. Since opening its Seoul office in 2021, the firm has been serving institutional clients with a focus on real estate and infrastructure. It is also growing its portfolio in renewable energy sectors, including solar and offshore wind power.

As a subsidiary of the Teachers Insurance and Annuity Association of America, Nuveen manages assets totaling approximately $1.3 trillion, positioning it as a major player in institutional investment worldwide.

Key Takeaways for Real Estate and Construction Professionals

• AI-driven growth is creating new demand for digital infrastructure, including data centers and energy systems.
• Private real estate is currently underallocated in portfolios, offering room for strategic investment.
• Limited new construction supply due to labor constraints could support rental price increases.
• South Korea is a growing market for real estate and renewable energy investments.
• A medium-term investment horizon (3-7 years) is advisable to capture market recovery.

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