FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION AND NOT FOR USE BY RETAIL INVESTORS

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1 A Global View June 2018 Andy Schofield, Director of Research FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION AND NOT FOR USE BY RETAIL INVESTORS. PLEASE REFER TO DISCLOSURE PAGE FOR IMPORTANT INFORMATION

2 Fourth-largest real estate investment manager globally* TH Real Estate Dedicated to delivering global real estate solutions to global clients Global investment manager specialising in real estate equity and debt investment worldwide with $114bn of real estate assets under management Over 80 years of real estate investment experience and client service Over 500 professionals located in 24 cities throughout the US, Europe and Asia-Pacific, offering a sophisticated global perspective and deep local expertise, underpinned by market-leading research Affiliate of Nuveen (the investment manager of TIAA) Source: TH Real Estate, March 2018 Note: Staff numbers are calculated on a pro-rata basis *Source: ANREV/INREV/NCREIF Fund Manager Survey Survey rankings of 177 fund managers globally by AUM as of December 31, FOR FINANCIAL PROFESSIONAL AND INSTITUTIONAL INVESTOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC I10319

3 Global real estate presence with local expertise Americas $76bn AUM 230 employees Boston Charlotte Chicago Dallas Hartford Miami New York Newport Beach San Francisco Washington DC Europe $35bn AUM 267 employees Edinburgh Frankfurt Helsinki London Luxembourg Milan Madrid Paris Stockholm Vienna Asia Pacific $3bn AUM 21 employees Hong Kong* Shanghai Singapore Sydney Tokyo** $114bn AUM 518 people 24 cities *Two Nuveen employees in the Hong Kong office are dedicated to supporting TH Real Estate in the region. **Planned presence in Tokyo as of H Source: TH Real Estate, 31 March Staff numbers are calculated on a pro-rata basis. 3

4 #1 A resilient universe

5 Global Megatrends Impacting long term structural demand for real estate Resilient Strategies: Focus on those locations that continue to benefit from global megatrends (value creation) Rising consumption supporting demand for retail, leisure residential and logistics Increasing demand for real estate Supporting city based real estate strategies Enhanced Strategies: Focus on locations best placed to enjoy structural growth as a result of global megatrends Rising Middle Classes Urbanisation And locations that are defensive in light of disruptive megatrends (value preservation) Creating opportunities for investment in emerging economies and niche sectors Ageing Population Shift of Economic Power Changing demand for real estate Climate Change Technology Tech and environmental disruption creates threats and opportunities And emerging locations and sectors that profit from structural and geographical shifts in demand TH Real Estate Q

6 Millennials drive future GDP growth Youthful cities expected to experience stronger growth % per annum forecast GDP growth ( ) vs millennials as % of total city population 6% Forecast GDP Growth 5% 4% 3% 2% Asia Pacific Europe North America 1% 0% -1% 20% 22% 24% 26% 28% 30% 32% 34% 36% 38% Source: Oxford Economics, 2018, TH Real Estate, 2018 % of millennials in total population 6

7 Shift of Economic Power to the East The changing world order of cities By 2030, 23 of the worlds top 50 cities will be in Asia Pacific Top 50 cities globally 2000 Top 50 cities globally 2030 Source: Oxford Economics,

8 Cities not countries Best and worst performing cities in Europe Difference in GDP growth 2007 to 2017 (percentage points), best versus worst city in each country Wroclaw London Berlin Milan Toulouse Madrid Szczecin Belfast Duisburg Naples Strasbourg Valencia Poland UK Germany Italy France Spain Source: TH Real Estate Research, National Statistics Offices, Oxford Economics 2018

9 Our proprietary city-focused approach Identifies those cities best-positioned for structural growth Filtering over 4,000 cities to focus on locations bestpositioned for structural growth 4,000 Scale filter: Cities with a metropolitan area population of 150, ~900 Transparency filter: Cities with liquidity, data availability, property rights and good transaction processes ~200 Stability filter: Cities in countries with adequate political and economic stability ~90 Megatrend filter Boston, MA Our proprietary research process identifies the top 2% of cities that we believe to be best-positioned in light of global megatrends: Urbanisation Rising middle-classes Ageing population The rise of economic strength in the East Technology Sustainability Source: TH Real Estate,

10 Scale factors: Economic and human capital Population Population in 2017 Number of households & household size Number and % of wealthy households Volume & retail sales per head Affluence Scale factors Productivity GDP GDP per head Youthfulness Source: TH Real Estate, Q Number and % of millennials 10

11 Social capital and sustainability International flights Connectivity Tech start-ups Patent releases JLL Innovative Cities Index Innovation Scale factors Sustainability Air quality Climate change vulnerability Grid carbon intensity Liveability Quality of life factors: housing; health; crime; natural environment; recreation & cultural Source: TH Real Estate, Q

12 Progressing Cities Liveable cities attract talent from elsewhere Source: Oxford Economics,, Q For institutional investor use only. 12

13 Growth factors: projected performance to 2030 GDP Retail sales and wealthy households Population & inward migration Households & household size Source: TH Real Estate, Q

14 US scale cities Size of bubble represents size of economy (number = US rank) 14

15 US growth cities Size of bubble represents GDP growth (number = US rank) 15

16 City universe by region Selected cities share of population, GDP and future growth Cities 42 Cities 17 Cities North America Europe Asia Pacific Population GDP Population Growth GDP Growth Source: Oxford Economics,, Q For institutional investor use only. 16

17 Portfolio weightings can be adjusted to suit risk appetite Scale Social Growth Sustainability Core 50% 20% 10% 20% Resilient 27% 26% 27% 20% Enhanced 20% 20% 40% 20% Source: TH Real Estate, Q

18 #2 Portfolio considerations

19 Global office portfolio considerations 91 Resilient cities Target universe 68 office centres Scalable markets for office 20 highly liquid & dominant centres Satisfies global liquidity Structural Add best markets for structural and cyclical attributes Portfolio especially if they improve diversification and reduce volatility Source: TH Real Estate,

20 Liquid vs attractive cities Concentration of liquidity but smaller cities offer another dimension Cumulative share of global office liquidity 1, % Impact of adding additional cities London Vienna Dublin Munich Amsterdam Copenhagen Brussels Paris Stockholm Sydney Frankfurt Singapore Melbourne Helsinki Berlin Manchester Edinburgh Perth Barcelona Brisbane Top 20 cities ranked by structural attractiveness and cycle factors 2, N. America Europe Asia Pacific Cities also represented in global 20 most liquid Source: RCA March 2018 and Oxford Economics Spring : Liquidity measure based on share on global transactions , share of global transaction in 2009, and total size of office labour force in terms of FBS jobs. Global office transactions defined as total of 71 Global cities in investible cities/countries selected by TH Real Estate Research s proprietary lobal Cities Model. Source: TH Real Estate Research, Spring :Ranking based on quality of life scores, innovation score, connectivity score, % of millennials in population, rental growth in next 5 years, relative rental growth compared with previous 5 years and the pricing relativity with corresponding country 10-year bond yield compared with 10-year average spread. 1 = best. 20

21 Liquidity vs Attractiveness Highly liquid Less attractive For institutional investor use only. 21

22 Consumer services Our proprietary city-focused approach Picking cities for diversification Transport, storage, information & communication Breakdown of economy % GDP Financial & Business Services Public Services Industry Scale cities Soft cities Growth cities New York London Paris Los Angeles Melbourne Berlin Singapore Guangzhou Beijing Shanghai Houston Austin Many global cities strategies focus only on gateways cities Cities that score well on soft factors or growth measures tend to offer greater diversification benefits Source: Oxford Economics, 2017

23 Performance correlations, total returns LA-NYC Houston - Moscow LA - Brisbane Hamburg - Munich Madrid - Osaka Nagoya - Osaka Worst diversifier Miami - SFO Average correlation Houston - Manchester Atlanta - Beijing Dusseldorf - Manchester Lisbon - Beijing Intra US US - Europe US - Apac Intra Europe Europe - A Pac Intra APAC Beijing - Osaka Best diversifier Source: PMA, Prime returns net of depreciation and costs for 10 US cities, NCREIF return for 14 US cities, 13 prime APAC markets and 34 prime European centres For institutional investor use only. 23

24 #3 Tactical considerations

25 Real estate-bond yield spreads Difference between current and 10-year average spread US Asia Pacific Europe Spread (bps) Brussels London Madrid Milan Frankfurt Munich Paris Stockholm Hamburg Amsterdam Berlin Hong Kong Seoul Sydney Tokyo Singapore Beijing Shanghai Houston Chicago San Francisco Washington DC Atlanta New york Los Angeles Dallas Boston Source: TH Real Estate Research Q estimates for European prime initial office yields. CB EA for US, cap rates and PMA for APAC prime initial yields. Oxford Economics Q for country bond yields. 25

26 Growth outlook vs pricing risk in global office markets Source: TH Real Estate Research, Spring 2018 (proprietary scoring models) For institutional investor use only. 26

27 #4 Thematics

28 Not just about locations it s also about themes Structural growth sectors Opportunities Needs based real estate: Senior housing Student housing/care Last mile logistics Investment in experience/hospitality Investing into structural change ie co-working Risks Retail Late cycle pushes investors up risk curve Interest rates rise faster than expected? Beware disruption from sharing economy New technologies Source: TH Real Estate, Q For institutional investor use only. 28

29 Important information This document is intended solely for the use of professionals and is not for general public distribution. Past performance is no guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. Any investment will be made solely on the basis of the information contained in the Prospectus or offering documents (including all relevant covering documents), which will contain investment restrictions, risks and fees. This document is intended as a summary only and potential investors must read the Prospectus or other relevant offering document before investing. This document is not directed at or intended for any person (or entity) who is citizen or resident of (or located or established in) any jurisdiction where its use would be contrary to applicable law or regulation [or would subject the issuing companies or products to any registration or licencing requirements]. This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Financial professionals should independently evaluate the risks associated with products or services and exercise independent judgment with respect to their clients. TH Real Estate is a real estate investment management holding company owned by Teachers Insurance and Annuity Association of America (TIAA). TH Real Estate securities products distributed in North America are advised by UK regulated subsidiaries or TIAA-CREF Alternatives Advisors, LLC, a registered investment advisor and wholly owned subsidiary of TIAA, and distributed by Nuveen Securities, LLC, member FINRA. TH Real Estate is an investment affiliate of Nuveen, LLC ( Nuveen ), the investment management arm of TIAA. TH Real Estate is a name under which Nuveen Real Estate Management Limited provides investment products and services. Real estate investments are subject to various risks, including fluctuations in property values, higher expenses or lower income than expected, and potential environmental problems and liability. Please consider all risks carefully prior to investing in any particular strategy. The portfolio s concentration in the real estate sector makes it subject to greater risk and volatility than other portfolios that are more diversified and its value may be substantially affected by economic events in the real estate industry. International investing involves risks, including risks related to foreign currency, limited liquidity particularly where the underlying asset comprises real estate, less government regulation in some jurisdictions, and the possibility of substantial volatility due to adverse political, economic or other developments. Past performance is no guarantee of future performance. This document is not directed at or intended for any person (or entity) who is citizen or resident of (or located or established in) any jurisdiction where its use would be contrary to applicable law or regulation [or would subject the issuing companies or products to any registration or licencing requirements]. Issued by Nuveen Real Estate Management Limited (reg. no ), (incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3BN) which is authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and monitored G-INST-AN-09/18 COMP For institutional investor use only. 29