Nubin Asset Management: "Now Is the Right Time for Real Estate Investment... Attention Needed on Natural Assets Such as Farmland and Forests"

Subsidiary of a U.S. Pension Fund Managing $1.3 Trillion
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Jaeho Jang, Korea Institutional Representative of Nubin Asset Management, held a press briefing on the 10th in Yeouido, Seoul, introducing the outlook for the real asset market.

Nubin Asset Management, a U.S.-based firm specializing in real asset investments, emphasized that now is an opportune time for real estate investment. The company analyzed that the global artificial intelligence (AI) boom, which has driven up stock markets worldwide, will also have a positive impact on the real estate market by increasing demand for data centers. Furthermore, Nubin Asset Management highlighted the importance of 'natural assets,' such as farmland and forests, which are distinct from traditional assets, as a means of portfolio diversification.

On September 10, Nubin Asset Management held a '2025 Global Real Asset Market Outlook Press Briefing' at the Conrad Hotel in Yeouido, Yeongdeungpo-gu, Seoul, and made these statements.

Nubin Asset Management is a subsidiary of the Teachers Insurance and Annuity Association of America (TIAA) and manages funds from over 1,300 institutions across 32 countries. As of June, its assets under management (AUM) totaled 1.3 trillion dollars (approximately 1,803 trillion won).

Real Estate, Which Declined After COVID-19, Is Now Entering a Recovery Phase

Chad Phillips, Global Head of Nubin Real Estate, explained, "After the global real estate values dropped during the COVID-19 pandemic, they have yet to recover, while the value of stocks and bonds, which fell in 2022, has since rebounded. As a result, the share of private real estate in portfolios fell below 10%, reaching 7.6% as of the end of June this year." Previously, the real estate share in 2021 and 2022 was 10.0% and 13.7%, respectively.

For this reason, the company analyzed that current conditions are favorable for real estate investment. Chad Phillips stated, "Given the trend of former U.S. President Donald Trump's strengthened anti-immigration policies, the supply of construction labor is decreasing, and construction material costs are rising, which will further reduce new construction supply. In a situation of supply shortage, rents will rise, and existing real estate assets, which do not bear construction costs, will inevitably perform better."

Abigail Dean, Global Head of Strategy at Nubin Real Assets, also noted, "Real estate provides income such as rental yields, offering both inflation hedging and diversification effects, which can reduce asset volatility. With the global AI boom driven by major U.S. tech companies, demand for data centers and electricity is increasing worldwide, so infrastructure assets related to these trends deserve attention."

Natural Assets Are Suitable for Hedging Due to Low Correlation with General Assets

Nubin Asset Management also emphasized the need to invest in 'natural assets' such as farmland, forests, and various crops. Martin Davies, Head of Nubin Natural Capital, said, "Thirty percent of the earth's land is farmland, another 30% is forest, and 70% of water is used for agriculture, showing that the planet's infrastructure is rooted in natural capital. Natural capital has little correlation with other asset classes, making it possible to hedge against economic cycles, interest rate environments, and capital market sentiment."

Especially with the rise of AI and eco-friendly energy, the scarcity of natural assets has increased. Martin Davies explained, "Farmland is being converted into data center sites or repurposed for solar and renewable energy, reducing the amount of farmland available. As a result, there is increasing demand to boost production per unit area. Improving productivity raises returns and is also beneficial for the environment."

However, he cautioned that, as a new asset class, there are barriers to entry for investors. There is a lack of awareness regarding indicators for farmland and forests, and challenges such as regulatory environments, tariffs, and trade disruptions in various countries.

Jang Jaeho, Korea Institutional Representative of Nubin Asset Management, said, "To address these challenges, Nubin Asset Management secures local experts worldwide to identify and manage assets. For Korean institutional investors such as pension funds and mutual aid associations, we will not only provide opportunities to invest in new assets but also offer comprehensive solutions to review and advise on their existing asset portfolios."

This content was produced with the assistance of AI translation services.