Hamburg’s Union Investment Real Estate (UIRE) has invested about €1.4bn in property assets this year alone and is aiming to reach a target of €2bn by the end of the year.
Among the transactions were the acquisitions of commercial property Rosmarin Karree in Germany, a Belgian shopping centre, a San Francisco office and a commercial building in Germany, which will be integrated into UIRE’s private funds’ portfolios.
Investments for institutional funds included German shopping centre Europa-Galerie and a Helsinki office project. The company’s latest acquisition of shopping centre Manufaktura for the UniImmobilien Deutschland fund took place in Poland and, according to head of real estate marketing and communications Fabian Hellbusch, the company is currently negotiating another investment in Warsaw.
To keep the deal pipeline busy, UIRE is eyeing not only existing buildings but also project developments. “About half of the deals closed this year were project developments,” says Hellbusch.
UIRE focuses its investments on core properties for its range of open-ended and institutional funds. This year the firm has made a number of acquisitions for its open-ended real estate funds UniImmo Deutschland and UniImmo Europa – there is more to come reveals Hellbusch.
“We have got a luxury problem. The UniImmo Deutschland is not open for distribution due to its high liquidity. It will remain closed until we have found sufficient suitable properties to invest the capital.”
Besides Poland, the company considers Finland, France, the UK – excluding London – the US, Luxembourg, Germany and the Netherlands interesting markets. “London’s real estate is overpriced,” says Hellbusch, “but we have recently made good investments in Cardiff and Glasgow.”
Institutional investor, developer and landlord UIRE has €20bn assets under management. The company focuses on commercial property and mainly invests in city-centre office space and business parks but also holds retail properties (accounting for about 25% of its portfolio), hotels (15%) and logistics properties (5%). UIRE is active in 25 country markets and has subsidiaries in Paris, Madrid, New York and Singapore.
Established in 1965 as co op Immobilienfonds Verwaltung in Hamburg, UIRE has a strong history as provider for open-ended real estate fund products. It manages three open-ended funds with a total volume of about €18bn. Although Union Investment’s private fund business is thriving, the company is working on the expansion of the institutional business, which was recently rebranded under the name Union Investment Institutional Property.
The institutional fund business was launched in 1977 together with the first institutional fund DEFO Immobilien Nr 1, which is still standing. Since June last year UIRE has received €1bn of commitments for the institutional business.
The company launched the institutional retail property fund UII Shopping Nr 1, receiving about €300m of commitments by institutional investors. Established in mid-2011 the fund currently holds the German shopping centres Förde Park in Flensburg and Breisgau Center in Freiburg.
Focusing on shopping centres with more than 25,000 m² and a value of more than €90m, the fund will invest in Germany, France, Belgium, Italy, the Netherlands and Austria but is also considering Poland and the Czech Republic.
Via its newly established spezialfund Residential Value, the firm’s only vehicle investing in residential property, UIRE recently raised €250m. The spezialfond was launched in response to a request from one of UIRE’s clients and Berlin’s Dupuis was appointed as asset manager for the fund.
In September last year, the fund made its first investment in the residential complex Ortlergärten located in Berlin, which is the fund’s geographical focus.
During the last six months of 2011, the firm also established a special-purpose vehicle for a pension fund which received commitments of €350m.
Union Investment Institutional Property’s latest achievement was the collaboration with German private health insurance company Süddeutsche Kranken und Lebensversicherung (SDK). On behalf of its client, UIRE launched the two fund-of-funds, SDK-Immoselect and SDL-Immoselect, which will have a total target of €250m.
The two funds will invest in real estate spezialfonds and similar public vehicles, and will focus on stable income and economic sustainability. The aim is to establish a European diversified portfolio with a strong focus on retail, health care and industrial properties. The collaboration with SDK marks UIRE’s first fund-of-funds project.
UIRE believes there is increased demand for institutional products in the market and so plans to fast-track this business segment further. Hellbusch says: “We are looking to develop additional institutional products and are working on establishing additional collaborations, in particular with Dutch and UK companies.”
