Expansion of institutional real estate business across four pillars
The decision in the mid-2000s to expand the company’s institutional real estate business marked another milestone in the history of Union Investment and its Real Estate segment. Union Investment Institutional Property GmbH was developed accordingly in several stages, starting in 2011. Comprising four pillars, this powerful platform enables increasingly customized real estate solutions for institutional clients.
“The decision to expand the institutional real estate side was taken with a firm eye on the future and supported by exceptional growth in Union Investment’s business with institutional clients,” explains Dr. Christoph Schumacher, a member of the management team at Union Investment Institutional Property GmbH. An existing investment management company which now has over 40 years of expertise in institutional real estate, DEFO GmbH, provided the foundation for a stronger presence in the institutional market. In 2009, following its integration into the Union Investment Group, DEFO GmbH was renamed Union Investment Institutional Property GmbH.
A year later it relocated its offices to Hamburg, moving into the refurbished EMPORIO building. This organisational and physical integration into Union Investment's Real Estate segment leveraged the strength, stability and reliability of Union Investment as part of a deliberate umbrella brand strategy. DIFA AG, which became Union Investment Real Estate GmbH in 2007, was another key component of the new platform for institutional real estate business right from the start. It contributes its deep expertise in active asset management, sourcing of national and international real estate and value creation.
Four pillars underpin customized real estate solutions for institutional clients
Further development of the new, powerful platform for customized institutional real estate solutions took place from 2011 onwards. “Union Investment is seeking to sharpen its focus on institutional investors who recognise the benefits of real estate as an asset class, which include stable returns, a low correlation with equities and bonds, and inflation protection,” explains Alexander Schindler, the board member at Union Investment responsible for institutional clients. By gradually expanding the product portfolio for institutional investors, Union Investment aims to extend the company's market-leading position in Europe.
The enhanced platform offers solutions based on four pillars. One pillar consists of retail funds targeted at institutional investors, with broadly diversified portfolios. Actively managed special funds are also available, i.e. open-ended and closed-ended thematic and multi-asset funds, special mandates and club deal solutions for one or several investors. Service KVG mandates comprising administrative services and funds of funds that bring together a variety of different real estate investments in a single vehicle round off the product range. This wide choice combined with close collaboration between Union Investment Institutional Property and Union Investment Real Estate will allow the company to reach new milestones going Forward.