Union Investment’s real estate business is in excellent shape: In 2013, growth was among the highest in the company’s history. At some EUR 2.3 billion, net sales of open-ended real estate funds for private investors once again rose significantly compared to the prior year figure of EUR 1.8 billion. Union Investment also attracted approximately EUR 1.4 billion in new capital commitments for its institutional real estate funds and expanded its institutional offering by adding six new real estate products. Compared to the previous year, this resulted in Union Investment’s actively managed real estate fund assets increasing by 12 per cent to EUR 23.8 billion, of which EUR 20.2 billion are invested in retail funds. Union Investment is now the largest provider of this asset class in Germany (as at 31 October 2013).
“With returns of between two and three per cent, our real estate retail funds offer an attractive and stable investment option in the current low interest rate environment,” said Dr. Reinhard Kutscher ( pictured) head of the real estate segment at the Union Investment Group. “Backed by our strong position in Europe, we plan to extend the international reach of our property investment activity in 2014 and also make managing our existing real estate holdings a high priority.”
The growth in sales is reflected in dynamic transaction activity. Despite strong worldwide investment demand for property in 2013, Union Investment was able to channel capital inflows into a total of 31 property acquisitions worth some EUR 2.14 billion. Alongside the high purchase volume, the investment team headed by Chief Investment Officer Dr. Frank Billand also managed to sell 19 properties with a total value of EUR 715 million. The sales portfolio covered six national markets, including the Czech Republic, Japan, the US and for the first time Mexico.
The new acquisitions were mainly in the stable property markets of Northern Europe. In addition to purchases in Finland, France, the UK, the Netherlands, Switzerland and Poland, Union Investment expanded its real estate portfolio in Germany in particular. With a total investment volume of some EUR 1.35 billion, the investment management company secured 21 extremely well-let properties and new build projects in its home market, such as the MainTor Porta in Frankfurt/Main, the forum am Hirschgarten development in Munich and the Kröpcke Centre in Hanover. Union Investment was also one of the most active hotel investors in the country in 2013, completing a total of seven hotel transactions in Germany worth approximately EUR 271 million, mostly acquired for the company’s new hotel fund. At the same time, Union Investment expanded its approximately 30-year involvement in the US office property markets. The purchase of the fully let Research Park III & IV office property in Austin, Texas reflects the Unilmmo: Europa and Unilmmo: Global strategy of tapping into new locations in the US with strong employment growth.
Source : Company