La tedesca Universal-Investment acquisisce le “Yi Fang Towers” a Shanghai

Germany’s largest independent investment

company Universal-Investment has reached another milestone on its ambitious growth path as fund

service platform – the acquisition of the Yi Fang Towers in Shanghai in cooperation with Alpha Investment

Partners Shanghai for a real estate fund of its client Bayerische Versorgungskammer. This marks the first

direct investment in China as well as the 1,000th property to be administered in a special fund for

institutional investors.

«Buying 1,000 properties worldwide in around eight years together

with institutional investors and asset managers is a tremendous

growth story that underscores the quality of our offering and the

high level of trust that customers place in us. The very positive

development of our real estate business represents an important

milestone for us on our way to becoming the largest European fund

service platform for all asset classes. We will continue making

significant investments in specialists, IT and new locations to achieve

this» said Michael Reinhard, CEO of Universal-Investment.

Globally active – strong demand in Asia

Since breaking into this segment, Universal-Investment as a fund service platform has launched 45 special

funds for institutional investors, such as pension funds or insurance companies as well as fund initiators,

and has teamed up with 35 real estate asset managers searching worldwide for the best properties. This

is also reflected in figures: in 2019, more than one third of all real estate purchases for funds on the

platform were made in Asia. Therefore an office is to be opened in Asia soon in order to build up local

capacities and expertise.

Universal-Investment creates the appropriate structures for clients to enable them to invest efficiently

and flexibly. At the same time, the company provides support in meeting all necessary legal requirements

and helps to create transparency through state-of-the-art reporting. To further automate real estate

administration, the company is also investing in enhanced IT systems and data analytics to further expand

its range of services for customers.

Real estate and other alternatives growing in importance; KVG model continues to assert itself

One reason for the real estate segment’s strong growth is the changing behaviour of investors. In

response to the persistently low interest rates, they are investing more in alternative asset classes, such

as real estate, with which adequate returns can still be generated. Since the product division was founded

in 2011, the gross volume of administered real estate funds has grown from an initial 1.1 billion euros

to over 22 billion euros.

The second growth catalyst is the German Master KVG concept from the securities sector which has now

been established in the real estate sector. In the early 1990s, Universal-Investment pioneered the

approach of separating portfolio management and administration in the securities sector; today, around

60 percent of securities special funds in Germany follow this principle. In 2011, Universal-Investment

became pioneer again by being the first investment management company to apply the Master KVG

concept to the real estate sector. At the moment, every fourth euro invested in German real estate special

funds is managed according to the Master-KVG principle, and the trend continues to rise. Within just a

few years, Universal-Investment has risen to third place on the league table of the largest providers of

real estate special funds in Germany. «With the Master KVG concept, we create efficiency, transparency

and flexibility for our clients – for all asset classes. Our experts at our locations in Germany and

Luxembourg also enable customized solutions to be created for every investor» Reinhard continued.

Shift in real estate allocation in terms of region and sector

A close look at the asset allocation also reveals some clear developments. An analysis of the real estate

capital invested on the Universal-Investment platform shows that demand for North American real estate

has been continuously rising since 2014, while now investors regard the price level as no longer tenable

and have therefore recently lowered their exposures. In contrast, the Asian markets have become more

attractive. «China in particular is gaining in importance because broadly diversified investors are no longer

able to capture the expected returns in saturated markets and are evidently prepared to take higher

risks» explains Marcos Joos, Head of Real Estate Investment Management. «Our current real estate

investor survey shows that the price level in Europe, especially in core locations, is increasingly no longer

regarded as acceptable. This is another reason why, with 9 percent of all respondents, far more real

estate investors are considering Asia than in the past» added Joos.

Changes at sector level can also be seen. The share of retail and catering in real estate investments on

the platform has been falling constantly for years, most recently to 33.1 percent. In 2016, 44.2 percent

were still invested in this class. Instead, more and more is being invested in office space and apartments,

especially in niche segments such as micro living or student residences.

Source : Company

The Yi Fang Towers in Shanghai