Going Global
The origins of Union Investment’s international investment strategy date back to the DIFA days. In the mid-1980s, the real estate fund management company already offered its investors the opportunity to invest outside the European Economic Area via the DIFA-Grund fund. The subsequent addition of DIFA-Global further widened the scope for international exposure.
After initial investments in Washington and Atlanta between 1986 and 1988, DIFA made its first acquisitions in Europe ex-Germany in the early 1990s, starting in London. The systematic creation of a pan-European portfolio began somewhat later, in 1999. The Fourth Financial Markets Promotion Act of 2002 then enabled DIFA to access other continents as well. In 2003, exposure to the US market was boosted by the acquisition of Millennium Tower in Seattle for DIFA-GRUND (now called UniImmo: Europa). In the same year, as part of an explicit commitment to expansion, DIFA teamed up with Metzler North America to purchase additional office properties for its international funds in major US business centres, i.e. Washington D.C., New York City, San Francisco and Chicago. Launched in 2004, DIFA-Global (now known as UniImmo: Global) acquired its first overseas property in 2005, the five-storey 5th & Pine office complex in the heart of Seattle, thus living up to its Name.
Worldwide exposure for stable growth and reliable returns
Alongside North America, DIFA’s investment strategy increasingly focused on opportunities in South America. In 2005, DIFA-Global duly expanded its activities into Latin America with acquisitions in Mexico City (Torre Mayor) and Monterrey (Tamayo 100). The acquisition of Bell Trinity Square in Toronto in the same year also saw the company entering the Canadian market. “Right from the start, the stated objective was to exploit opportunities for this fund overseas,” explains Dr. Reinhard Kutscher, Chairman of the Management Board of Union Investment Real Estate GmbH. DIFA-Global was the first German open-ended real estate fund to invest in Latin America. The headline at the time in German real estate newspaper Immobilien-Zeitung read “Caramba – Difa!”. Entering the Chilean market in 2006 resulted in many years of stable rental income for the fund. In 2012, the Chile portfolio was successfully sold off and exposure to the US was increased.
Acquisitions for UniImmo: Europa included fully let office properties in Austin and Minneapolis – two excellent locations with strong job growth. Alongside the focus on Latin America, from 2006 onwards DIFA began building a portfolio in the high-growth Asia-Pacific region which is now worth around EUR 920 million. The opening of an Asian office in Singapore in 2007 provided the necessary local presence. Immediately afterwards, the company was able to announce its first Asian investment for DIFA-Global when it acquired the Ernst & Young Building in South Korea. After making major investments in South Korea, Singapore and Japan in 2006 and 2007, Union Investment extended its reach to Malaysia in 2008 with the acquisition of the CapSquare Tower 2 project in Kuala Lumpur. Following a prolonged break, Union Investment re-entered the Asia-Pacific market last year with the purchase of the fully let grade A office property J6 Front in Tokyo and the acquisition of the Southpoint office project in Brisbane, marking its first milestone down under.