Half a century of real estate expertise in a single fund

The launch of the open-ended CO-OP Immobilienfonds on 1 July 1966 by CO-OP Immobilien-Fonds Verwaltungs AG, which had been founded shortly before, was a milestone in many respects – for German open-ended real estate funds, for the investment sector and, of course, for the fund initiator, today's Union Investment Real Estate GmbH. Subsequently renamed UniImmo: Deutschland, the fund benefits from over 50 years of real estate expertise.

The first annual report, covering 1966/67, stated that: “The objective of the fund is to enable as many savers as possible, primarily from among the members of the consumer cooperatives, to share in the income and asset growth generated by real estate.” Newly established by the cooperative movement, the company  was only the second of its kind in Germany. As well as offering saving opportunities for its members, the purpose of the fund was to support store expansion by the consumer cooperatives.


According to Jürgen Ehrlich, who worked for the company from 1965 to 2003, latterly as a member of the Management Board, it was difficult to imagine in the early days “how significant this form of investment [would become] in the investment sector”. Expansion was gradual, but steady. “Judged by the standards of the day the first business year was an out-and-out success,” adds Thomas Röhrs, the current fund manager of UniImmo: Deutschland. By the end of its first year, the fund was worth DM 17.7 million. According to the annual report, CO-OP Immobilien-Aktiengesellschaft had by then purchased “eight completed properties and five sites for properties at the planning stage.” It also stressed that “properties were selected based on reliable income potential and positive capital appreciation, combined with regional diversification and a wide range of uses, from CO-OP Centres to supermarkets, retail stores, professional premises and apartments.”

From modest beginnings to major player

Right from the beginning, the focus was thus on achieving sustainable, stable performance through diversification across a range of property types and regions. These broad principles remain key criteria for Union Investment's business to this day. Diversification in terms of uses and national markets, plus wider international expansion from the 1990s onwards, have made the company’s funds less volatile and better able to withstand crises. Size is also a factor. In March 1981, DIFA-Fonds Nr. 1 broke the DM 1 billion barrier. By 1993, all of the funds had reached DM 4 billion. In November 2001, DIFA was able to announce that total assets under management had exceeded EUR 10 billion, while DIFA-Fonds Nr. 1 passed the EUR 7 billion mark in January 2002. Renamed UniImmo: Deutschland, the fund continued to grow, along with the other Union Investment funds. By 2013, the 14 real estate funds had a total value of EUR 23 billion.


This growth was not achieved without setbacks, however. On the occasion of his retirement from the company, DIFA Management Board member Jürgen Ehrlich recalled experiencing “about five (1966/67, 1974/75, 1981/82, 1992/93, 2001/03) serious economic crises with a corresponding impact on the real estate markets.” In addition, a major crisis hit the German property market in 2004 and subsequent years, triggering urgent action to cope with the fallout .The financial crisis of 2008 was another source of upheaval. A far-sighted decision by Horst Höger, a long-standing member of Union Investment’s Management Board, played an important role in enabling the company to ride the storm. He helped to ensure that open-ended real estate funds became part of the range of savings products offered by the Volksbanken Raiffeisenbanken banking network, while his principled rejection of investment by institutional and major investors in retail products prevented the kind of sudden capital outflows that undermine a fund’s viability.

Thanks to successful crisis management, UniImmo: Deutschland, one of the flagships of the German open-ended funds sector, is still on track. More than half a century of real estate expertise in a single product – a milestone achievement from which thousands of investors continue to benefit today.