Open-ended real estate funds

Open-ended
real estate funds



 

Our funds for private customers

Our open-ended real estate funds provide private investors with the opportunity to invest in broadly diversified portfolios that are actively managed by Union Investment, even where only modest amounts are available. The individual funds focus on different regions and have different risk-return profiles.

A stable foundation for investing in tangible assets
 

€ 34.1 billion

Amount invested in our open-ended real estate funds for private customers

We have been making the same product promise to our investors for over 50 years: dependable investment with a balanced risk-return relationship. We regularly receive top marks from rating agencies for our high level of expertise in property management and tenant management.
These independent assessments also highlight our strong international capabilities, while our open-ended real estate funds likewise regularly perform very well in industry Ratings.

Broad-based product family

We offer our investors a range of opportunities across different real estate funds that deliver attractive performance. The Unilmmo funds are marketed exclusively through our partners in the cooperative “Volksbanken und Raiffeisenbanken” network. immofonds 1 is targeted at private investors in Austria.

UniImmo:Deutschland Alexa Berlin

Unilmmo: Deutschland

The fund invests primarily in Germany. It also holds real estate assets in European cities such as Vienna, Paris and London.

UniImmo:Europa Barcelo Raval Barcelona

UniImmo: Europa

The fund’s focus is on European real estate locations, with ancillary investment in the Americas and Asia-Pacific.

UniImmo:Global One Coleman London

UniImmo: Global

The investment focus of our global retail fund is on the Americas, Asia-Pacific and Europe.

ZBI_Falkensee-Spandauer-Str_02

UniImmo: Wohnen ZBI

The Unilmmo: Wohnen ZBI investment universe comprises residential property of varying sizes and many different structures across Germany.

immofonds 1 Ramada Hotel Innsbruck

immofonds 1

immofonds 1 invests in office, commercial and mixed-use real estate in Austria and Germany.

About fund management

Find out more about our fund managers: UniImmo: Deutschland, UniImmo: Europa and UniImmo: Global.

Thomas Röhrs

Head of Fund Management
UniImmo: Deutschland

+ 49 40 34919 4164
thomas.roehrs@union-investment.de

Broer Kalow

Broer Kalow

Head of Fund Management
UniImmo: Global
+49 40 34919 4713
broer.kalow@union-investment.de

Axel Kleinefenn

Axel Kleinefenn

Head of Fund Management
UniImmo: Europa
+49 40 34919 4442
axel.kleinefenn@union-investment.de

Profiles of our fund managers

Thomas Röhrs

Thomas Röhrs has worked in fund management at Union Investment Real Estate GmbH in Hamburg since July 2008. As Head of Fund Management for UniImmo: Deutschland, he is responsible for the performance, management, strategic direction and control of this open-ended real estate fund.

Prior to taking up his current position, Mr Röhrs was employed in various roles at investment management company WestInvest between 1995 and 2008. He was responsible for marketing the WestInvest retail funds up to 2004, first as sales director and then as head of sales. From 2005 onwards, he worked in an investor management role, supporting institutional investors and carrying out key sales support tasks. Thomas Röhrs then took over the position of fund manager of open-ended real estate fund WestInvest 1 in 2007. Mr Röhrs was an officer in the German armed forces until 1994. He studied business administration at the University of the German Armed Forces in Hamburg.

Broer Kalow

Broer Kalow has been head of fund management of the open-ended real estate fund UniImmo: Global since October 2020. He previously worked in fund management at Union Investment Real Estate GmbH from October 2010 to June 2018.

From July 2018 to September 2020, Broer Kalow was responsible for the management of open-ended and closed-ended investment vehicles for institutional investors at Warburg-HIH Invest Real Estate as senior fund manager and authorised signatory.

He started his career at Ernst & Young, where Broer Kalow worked in due diligence and valuation of real estate and loan portfolio transactions from October 2006 to October 2010.

Axel Kleinefenn

Axel Kleinefenn joined Union Investment Real Estate GmbH's fund management team in March 2021. He is responsible for the performance, management, strategic direction and steering of the UniImmo: Europa open-ended real estate fund.

Axel Kleinefenn worked already for Union Investment from May 2002 to March 2009, initially as a research analyst and then as a fund analysis and portfolio management specialist. In April 2009, he moved to fund management at Warburg-HIH Invest Real Estate GmbH. Since April 2016, he has been Head of Fund Management, most recently responsible for a eighteen-member team of fund managers and analysts.

EU Disclosure Regulation

EU-Offenlegungsverordnung

With Regulation (EU) 2019/2088 of 27 November 2019 on sustainability-related disclosures (Sustainable Finance Disclosure Regulation), the EU is seeking to achieve more transparency in the financial services sector. Since 10 March 2021, financial market participants have been required to publish sustainability-related information with respect to the company itself and its products. This must include information on how participants integrate sustainability risks and how they consider the principal adverse impacts of investment decisions on sustainability factors.

Treatment of sustainability

The following description explains how sustainability risks are handled for the investment funds managed by Union Investment Real Estate GmbH (LEI 529900H8T3O0RWWDJA96).

Sustainability risks are environmental, social or governance events or conditions that, if they occur, could have a material impact – either actual or potential – on the value of the fund’s investments.

Sustainability risks are an integral part of known risks such as market risk, liquidity risk, counterparty risk and operational risk, and can influence the significance of these.  

I. Investment decisions

At Union Investment, investment decisions are made on the basis of a fundamental assessment process. The principle of ESG integration is also embedded into all investment decisions. ESG integration is understood as the systematic consideration of sustainability factors during each of the key steps of the investment process. These sustainability factors include environmental, social and governance matters.

At Union Investment, a team of internal sustainability experts is responsible for integrating sustainability factors into the fundamental assessment process. The team deals for example with special types of real estate and countries which, due to specific events and/or structural trends, are particularly significant in terms of risk, income and valuation when sustainability aspects are taken into account. The team issues investment signals and recommendations for all the real estate, real estate funds, real estate companies and fund managers concerned.

II. Incorporating sustainability risks into investment decisions

Risk managers and sustainability experts analyse the most material sustainability risks for the respective property or real estate fund, thus adding information on financially significant sustainability risks to the classic acquisition due diligence.

The results of the ESG analysis are placed on record together with individual sustainability factors. The Union Investment fund managers have access to these documents, which enable them to assess the sustainability risks inherent in portfolios and base their investment decisions on their findings.

In order to minimise sustainability risks, the fund managers seek constructive dialogue with the asset managers responsible for servicing and developing the real estate. The goal is to actively develop the portfolios with reference to opportunities and risks that may be connected with sustainability factors (Manage to Green). 

III. Impact on returns

In the long term, the way in which sustainability factors are treated can have a material impact on how the value of an investment develops. Real estate with insufficient sustainability standards may be more susceptible to event risks, reputational risks, regulator risks, litigation risks and technology risks. These sustainability risks can for example affect business operations, property value, the continued rentability of the property and the way in which it is managed. If these risks materialise, the investment could be negatively valued with a corresponding impact on the fund’s returns.

Change history:

10.03.2021: Initial publication

Principal Adverse Impact Statement of Union Investment Real Estate GmbH (LEI: 529900H8T3O0RWWDJA96)

As part of the cooperative financial group, we have always been committed to operating responsibly in accordance with cooperative principles, both at corporate level and in our core business area of fund management. Sustainability is therefore a key element of Union Investment’s corporate ethos. In line with this ethos, when making investment decisions we always ensure we consider the adverse impacts on sustainability factors. Our overall strategy for dealing with corporate responsibility and sustainability issues is also published regularly in our CSR Report.

1. Sustainability factors and adverse impacts

The company attaches particular importance to the principal adverse impacts of investment decisions on environmental, social and employee matters, human rights and combating corruption. In the real estate industry, adverse impacts on these factors could be caused by investing in real estate with poor environmental standards or by letting to tenants who are involved in controversial business practices or controversial areas of business. Controversial business practices are specifically defined as violations of the principles of the UN Global Compact (including child labour and forced labour) and serious violations in the areas of human rights, environmental protection and corruption. Controversial areas of business include the manufacture of banned and controversial weapons (weapons of mass destruction, landmines, cluster bombs) and carbon-intensive business areas such as mining and burning coal for electricity generation.

The adverse impacts that may arise as a result of investing in properties with poor environmental standards are, most notably, higher energy consumption and higher CO2 emissions. Increased greenhouse gas emissions are clearly incompatible with global efforts to combat climate change (including the Paris Agreement). Higher energy consumption leads to a shortage of resources and – if fossil fuels are used – ultimately to higher CO2 emissions. Sustainability indicators for such adverse impacts therefore include a commitment to fossil fuels, evidenced by investment in the corresponding properties and in properties with poor energy efficiency. These are supplemented by a further indicator (intensity of energy use).

2. Strategies for determining and weighting principal adverse sustainability impacts

The company’s strategies for determining and weighting principal adverse sustainability impacts on sustainability factors as part of its property investment and portfolio management activity are based on the principle of ESG integration. ESG integration means the systematic consideration of sustainability factors at each of the key steps in the investment process. Within this framework, sustainability experts and fund managers also analyse the principal adverse impacts on sustainability factors of planned investments and those already made, and document the results.

When determining the principal adverse impacts of investment decisions on sustainability factors, corresponding measures for action are reviewed by a team of experts. This team provides advice on the strategy for dealing with the principal adverse impacts on sustainability factors and, depending on the nature and scope of these, derives investment signals and recommendations for all real estate acquisitions concerned and all fund managers.

The company’s fund managers make use of this documentation to understand and evaluate the adverse sustainability impacts (e.g. energy efficiency, degree of involvement in fossil fuels, energy consumption) of investment decisions per property and for entire portfolios, basing their investment and portfolio management decisions on this information.

The principal adverse impacts are taken into account in the investment and portfolio management process specifically by (1) avoiding investments in buildings that are used to extract, store, transport or produce fossil fuels, (2) focusing on investment in energy efficient buildings, and (3) reducing the intensity of the energy consumption (kWh/sq m/year) of buildings at portfolio level. The company is committed to reducing energy consumption (kWh/sq m/year) of buildings at portfolio level by 10 per cent by 2030. Energy saving measures are designed to focus on buildings that do not meet the criteria for sustainable investment as set out in Regulation (EU) 2020/852 (Taxonomy Regulation).

Investment in buildings that are used to extract, store, transport or produce fossil fuels (e.g. filling stations) can only be made if they represent a minor part of the total investment in an acquisition (e.g. retail park with filling station).

In addition, as part of investment decisions and the development of existing buildings, the company is seeking to reduce the proportion of buildings in the fund portfolio that are not energy efficient. Roadmaps for the energy efficiency of buildings are developed and used to optimise the total energy consumption (kWh/sq m/year) of buildings at portfolio level.

The energy efficiency of buildings is initially evaluated during the acquisition process on the basis of nationally available documents such as Energieausweise (Germany/Austria), Energy Performance Certificates (large parts of Europe) and Energy Star (USA). This is then systematically documented by the company. Once the transfer of rights and obligations with regard to a real estate investment has taken place, the company collects and systematically evaluates specific energy consumption data where possible. When assessing the sustainability of investments, various sustainability aspects are weighted depending on their relevance for the investment in question. Two particularly important factors are consideration of investment in energy efficient buildings and avoidance of investment in buildings that are used to extract, store, transport or produce fossil fuels.

 

3. Measures for managing principal adverse sustainability impacts

The company uses two key measures to take into account the principal adverse sustainability impacts caused by investment decisions.

1. ESG integration
The principle of ESG integration explained above ensures that sustainability aspects, and thus also principal adverse sustainability impacts, are taken into account in all investment decisions.

2. Company-wide exclusion criteria
Real estate investments are excluded if the tenants or vendors are involved in controversial business practices and/or controversial areas of business. These include companies that violate the principles of the UN Global Compact, e.g. by committing serious violations regarding human rights, environmental protection or corruption. Companies are also excluded if they manufacture banned or controversial weapons (weapons of mass destruction, landmines, cluster bombs) or mine and burn coal to generate electricity (coal extraction >5% of sales, coal-fired electricity generation >25% of sales if there is no credible strategy for achieving carbon neutrality).


4. Consideration of international standards and frameworks
Union Investment’s fiduciary duty requires it to give top priority to investor interests. As well as applying the relevant laws and regulatory requirements, our approach to responsible investment is based on important national and international standards which serve as benchmarks for decisions. These standards include the United Nations’ Principles for Responsible Investment (PRI) and the UN Global Compact (UNGC). We also use these principles to identify the principal adverse sustainability impacts that are most significant in our case. Our understanding of values is based on the BVI Rules of Conduct (BVI 2019) and the German Corporate Governance Code (Government Commission DCGK 2019). Union Investment adheres to the ZIA sustainability code for the real estate industry.

 

In December 2015, at the same time as the UN Climate Change Conference in Paris, the Union Investment Group adopted a climate strategy entitled “2° is feasible”. It expresses the Group’s commitment to achieving and proactively supporting the long-term political objectives of reducing emissions. The climate strategy has since been refined due to further developments in this area. The Union Investment Group is now aiming to achieve carbon neutrality at company level by 2045. A separate climate strategy for the real estate portfolio, the Manage to Green strategy, was approved at the beginning of 2018 with the goal of achieving carbon neutrality by 2050.

The funds listed here take into account sustainability features according to Section 8 of Regulation (EU) 2019/2088

  • UniImmo: Deutschland
  • UniImmo: Europa
  • UniImmo: Global

The sustainability-related disclosures referred to in Article 10 of Regulation (EU) 2019/2088 are set out below:

UniImmo: Deutschland

Sustainability-related disclosure

Description of ecological features 
The company takes sustainability features into account both with the acquisition of real estate and in the context of portfolio management of real estate. Sustainability comprises ecological (environment – E) and social (social – S) criteria as well as good corporate governance (governance – G). Ecological features are, in particular, the CO2 reduction of a property as well as the consumption of energy in kWh per m2. Social features are, for example, projects that serve the common good. Good corporate governance is measured, among other things, by whether and to what extent users of the real estate apply controversial business practices within the meaning of the principles of UN Global Compact or whether their business activities are related to outlawed and controversial weapons.
For this fund, the company is pursuing an approach that is to ensure the sustainable orientation of the investment fund, in particular by taking ecological features in consideration. By allowing for ecological features, Union Investment addresses the role of buildings for achieving the Paris climate goals. With a significant reduction in CO2 emissions, the building sector can make a major contribution to achieving the climate targets. In addition, criteria of good corporate governance are taken into account in the context of the acquisition and management of real estate.
The regulatory requirements for the definition of social criteria are still under development. Against this backdrop, no social criteria are currently taken in consideration for this fund. However, both in the context of investment decisions and in the context of portfolio management, the company will regularly check to what extent it can include social criteria in its decisions.

Evaluation, measurement and monitoring of ecological features
The consideration of sustainability features constitutes an integral part of the so-called “manage to green” strategy the company has adopted to reach climate neutrality in 2050 with the aid of a package of measures.
With this strategy, a real estate portfolio is to be continuously improved in terms of sustainability and environmental soundness with regard to both investment decisions and portfolio management.
For the implementation of the “manage to green” strategy, the company has established a centralised platform – the ImmoSustain system – that is used for the evaluation, measurement and monitoring of ecological features. This system provides sustainability data on a centralised basis to control the sustainability management of the real estate.

Consideration of ecological features in the context of investment decisions

At Union Investment, investment decisions are made on the basis of a fundamental assessment process. The aim of these investments is to contribute to climate protection and limit the global rise in temperature to 2°C. To this end, the company has developed a method to define and implement measures for achieving these goals.
With the so-called sustainable investment check (SI check) developed by the company, buildings are assessed in terms of their sustainable quality on the basis of sustainability indicators prior to acquisition. The ecological features of a property are reviewed and analysed with the SI check. The SI check consists of seven categories in the areas of building automation, building shell and technology, resources, economy, user comfort, measures in operation as well as location. With this instrument both the actual condition of a building and the individual development potential of the property are ascertained and analysed.
In total, over 100 sustainability topics are analysed in the seven categories of the SI check. In category “1. Building automation”, a review is made of whether and which sensors are installed on ventilation and heating systems to control these systems efficiently. In category “2. Building shell and technology”, sustainability topics such as the proportion of green electricity, heat transfer coefficients, share of glazing and share of sun protection are analysed to derive measures for more energy efficiency and fewer greenhouse gas emissions. In category “3. Resources”, measures for water conservation and rainfall water use as well as greening measures are determined. Category “4. User comfort” comprises topics such as safety in and around the building or electric charging stations for vehicles. The efficiency of the building is determined by topics such as building geometry, flexible layout of the floor plan or diversified room typologies in category “5. Economy”. “6. Location” is the category in which the proximity to public transport, bicycle infrastructure, physical risks such as flood risks and other topics are fleshed out and followed up. Finally, in category “7. Measures in operation” an analysis is made whether building management, waste management and the selection of service providers are sustainable, for example.

The SI check data is collected by the local building service providers mandated by the company for the property in question and is then validated by the Asset Management of Union Investment.
For the evaluation of these sustainability topics, points are awarded that are added up for each category. The sum per category, weighted as a percentage, is integrated in a total score for each building. The total score is shown on a scale of 0 to 5, with 5 being the best result. The SI check is performed prior to every acquisition and is an integral part of the investment decision.
Buildings are only allowed to be purchased if a score of at least 2.5 is achieved. Otherwise, measures to achieve these scores must be budgeted at the time of purchase. These measures must be implemented within five years after transfer of ownership.
Along with the SI check, a mandatory environmental audit is carried out by an external service provider prior to each acquisition (including whether soil contamination might be present); the results are included in the investment decision. Furthermore, all buildings must have – if available in the country where the property is located – a valid Energy Performance Certificate, e.g. an energy certificate according to the German Energy Saving Ordinance (EnEV) or an Energy Star rating in the United States.
The SI check as well as all the other aforementioned building information is documented in the ImmoSustain system.

Consideration of ecological features in the context of portfolio management

To make a contribution to climate protection and limit the global rise in temperature to 2°C, ecological features are also taken in consideration in the context of portfolio management by applying a fundamental examination process. To do so, the company first uses the method already applied in the context of investment planning (use of the SI check).

Qualitative sustainability features
For portfolio real estate, an annual SI check is carried out and documented in the ImmoSustain system. The data is collected by the local building service providers mandated by the company for the property in question and is then validated by the Asset Management of Union Investment.
The ecological features of the property in the portfolio are reviewed and analysed based on the same seven categories upon which the SI check is also based. The evaluation of the sustainability topics and the calculation of the total score of a property in the portfolio are done according to the process already described in the context of the investment process.
In addition, environmental check lists form an integral part of the annual inspection routine at the buildings. They are helpful for hazard avoidance and safety. With measures such as the promotion of so-called green tenancy agreements in accordance with the standard of the Central Real Estate Committee (ZIA) and green property management contracts (obligation to have environmental management certified according to ISO 14.001 or a similar certification) and the promotion of sustainable tenant extensions, the existing buildings are further developed toward more sustainability. A green tenant agreement is a lease contract aimed at sustainability that is specially designed to encourage the tenant to use the property as sustainably as possible and encourage the landlord to manage the property as sustainably as possible. This is the case, for instance, when tenant agreements govern the sustainable management of a commercial property during operation; the provision of specified consumption and emission values by the tenant; as well as sustainable modernisation and other building measures for fostering a sustainable use of the property.
Quantitative sustainability features

An essential part of the analysis of the ecological features of a property in the portfolio is its emission and consumption data. The company collects and analyses the CO2 emissions (kg Co2/m2/year), the energy consumption (kWh/m2/year), water consumption (m3/m2/year) and waste (kg/m2/year) of each property. The data is automatically read by the company from utility bills and imported to the ImmoSustain system via a digital interface. CO2 emissions caused by the consumption of electricity, heating and cooling the buildings, have top priority. They are calculated per square metre and per year by the ImmoSustain system and compared to scientific data (Carbon Risk Real Estate Monitor, so-called “CRREM” data). The CRREM data take into account building classes and geographical locations and indicate whether a building is on the 2°C climate path or is making a contribution to limiting global warming to 2°C. This means, for instance, that office properties in Germany are not allowed to emit more than 67.3 kg of CO2 per m2 per year in 2030. If the CO2 emission of a building in the investment fund is higher than the CRREM 2°C climate path, measures for energy optimisation (e.g. replacement of the heating system) are derived and integrated in the annual investment plan.
A reduction in energy consumption contributes significantly to reducing CO2 emissions and thus makes a significant contribution to limiting global warming. This is why the company aims at reducing the energy consumption (kWh/m2/year) of the building in the portfolio by 10 percent by 2030. The focus of energy saving measures is to be on such buildings that do not meet the criteria for sustainable investments as defined in Regulation (EU) 2020/852 (“Taxonomy Regulation”).
For the analysis of the energy consumption of a property, energy certificates provide initial information on their energy efficiency. In addition, the consumption bills issued by the utility are entered in ImmoSustain monthly. This data shows the energy consumption per square metre for every property. In addition, an appropriate energy performance monitoring & assessment by external service providers will be introduced in nearly all buildings for a detailed analysis. It maps all technically relevant systems, analyses the energy consumption of a building and derives energy-saving measures such as the optimisation of building technology systems (cooling systems, electricity control) for the individual buildings. The consumption data (kWh/m²/year) of all buildings is consolidated and disclosed at portfolio level. It is used to determine the aforementioned goal and published on the company’s website.

Continuous development of the real estate
The ImmoSustain system enables all those involved in the process to obtain a quick and well-founded overview of the status of the sustainable development of individual buildings as well as of the portfolio as a whole. Fund management can thus take sustainability into account in a targeted manner when designing the portfolio. For this purpose, individual potentials are identified at building level as part of the analysis of the SI check and are backed up with measures to improve the overall score of the building. Taking into account the cost-effectiveness of the measures, they are then included in the annual budget planning and implemented in line with the overall strategy for a building. Measures can include, for instance, the installation of external sun protection, the purchase of green electricity or the installation of new building technology. The decision to implement measures in individual cases is made by the fund management as part of the annual investment planning. The requirement is that the portfolio as a whole achieves an average SI check score of at least 2.5.
In addition, regular checks are carried out to determine whether suitable measures can be taken to reduce a building’s CO2 emissions so as to achieve the 2° CRREM climate path. Depending on market developments and/or the fund’s performance, a process of selling a property may be initiated, if necessary.

Consideration of features of good corporate governance
No real estate is acquired whose sellers are companies that apply controversial business practices within the meaning of the principle of the UN Global Compact (UN initiative for sustainable and responsible corporate governance) or whose tenants use controversial business practices.
In the context of portfolio management, no tenancy agreements are entered into with tenants who apply controversial business practices within the meaning of the principle of the UN Global Compact (UN initiative for sustainable and responsible corporate governance).

Consideration of adverse impacts on sustainability factors

When selecting properties, the principal adverse impacts (PAIs) of these investment decisions on sustainability factors are also taken into account. Categories that can be used to determine adverse impacts on sustainability factors through investment in real estate are: fossil fuels and energy efficiency; additional climate and other environmental indicators such as the energy consumption of a building.

PAIs are taken into account specifically by (1) avoiding investments in buildings that are used to extract, store, transport or produce fossil fuels, (2) focusing on investment in energy efficient buildings (assessed using energy performance certificates), and (3) reducing the intensity of the energy consumption (kWh/sq m/year) of buildings at portfolio level.

Investment in buildings that are used to extract, store, transport or produce fossil fuels (e.g. filling stations) can only be made if they represent a minor part of the total investment in an acquisition (e.g. retail park with filling station).

In addition, as part of investment decisions and the development of existing buildings, the company is seeking to reduce the proportion of buildings in the portfolio that are not energy efficient. Roadmaps for the energy efficiency of buildings are developed and used to improve the total energy consumption (kWh/sq m/year) of buildings at portfolio level.

Information about principal adverse impacts on sustainability factors is also available in the fund’s annual report.

Change history:

01.11.2021: Initial publication

01.07.2022: Inclusion of description for considering adverse impacts on sustainability factors.

UniImmo: Europa

Sustainability-related disclosure

Description of ecological features 
The company takes sustainability features into account both with the acquisition of real estate and in the context of portfolio management of real estate. Sustainability comprises ecological (environment – E) and social (social – S) criteria as well as good corporate governance (governance – G). Ecological features are, in particular, the CO2 reduction of a property as well as the consumption of energy in kWh per m2. Social features are, for example, projects that serve the common good. Good corporate governance is measured, among other things, by whether and to what extent users of the real estate apply controversial business practices within the meaning of the principles of UN Global Compact or whether their business activities are related to outlawed and controversial weapons.
For this fund, the company is pursuing an approach that is to ensure the sustainable orientation of the investment fund, in particular by taking ecological features in consideration. By allowing for ecological features, Union Investment addresses the role of buildings for achieving the Paris climate goals. With a significant reduction in CO2 emissions, the building sector can make a major contribution to achieving the climate targets. In addition, criteria of good corporate governance are taken into account in the context of the acquisition and management of real estate.
The regulatory requirements for the definition of social criteria are still under development. Against this backdrop, no social criteria are currently taken in consideration for this fund. However, both in the context of investment decisions and in the context of portfolio management, the company will regularly check to what extent it can include social criteria in its decisions.

Evaluation, measurement and monitoring of ecological features
The consideration of sustainability features constitutes an integral part of the so-called “manage to green” strategy the company has adopted to reach climate neutrality in 2050 with the aid of a package of measures.
With this strategy, a real estate portfolio is to be continuously improved in terms of sustainability and environmental soundness with regard to both investment decisions and portfolio management.
For the implementation of the “manage to green” strategy, the company has established a centralised platform – the ImmoSustain system – that is used for the evaluation, measurement and monitoring of ecological features. This system provides sustainability data on a centralised basis to control the sustainability management of the real estate.

Consideration of ecological features in the context of investment decisions
At Union Investment, investment decisions are made on the basis of a fundamental assessment process. The aim of these investments is to contribute to climate protection and limit the global rise in temperature to 2°C. To this end, the company has developed a method to define and implement measures for achieving these goals.
With the so-called sustainable investment check (SI check) developed by the company, buildings are assessed in terms of their sustainable quality on the basis of sustainability indicators prior to acquisition. The ecological features of a property are reviewed and analysed with the SI check. The SI check consists of seven categories in the areas of building automation, building shell and technology, resources, economy, user comfort, measures in operation as well as location. With this instrument both the actual condition of a building and the individual development potential of the property are ascertained and analysed.
In total, over 100 sustainability topics are analysed in the seven categories of the SI check. In category “1. Building automation”, a review is made of whether and which sensors are installed on ventilation and heating systems to control these systems efficiently. In category “2. Building shell and technology”, sustainability topics such as the proportion of green electricity, heat transfer coefficients, share of glazing and share of sun protection are analysed to derive measures for more energy efficiency and fewer greenhouse gas emissions. In category “3. Resources”, measures for water conservation and rainfall water use as well as greening measures are determined. Category “4. User comfort” comprises topics such as safety in and around the building or electric charging stations for vehicles. The efficiency of the building is determined by topics such as building geometry, flexible layout of the floor plan or diversified room typologies in category “5. Economy”. “6. Location” is the category in which the proximity to public transport, bicycle infrastructure, physical risks such as flood risks and other topics are fleshed out and followed up. Finally, in category “7. Measures in operation” an analysis is made whether building management, waste management and the selection of service providers are sustainable, for example.

The SI check data is collected by the local building service providers mandated by the company for the property in question and is then validated by the Asset Management of Union Investment.
For the evaluation of these sustainability topics, points are awarded that are added up for each category. The sum per category, weighted as a percentage, is integrated in a total score for each building. The total score is shown on a scale of 0 to 5, with 5 being the best result. The SI check is performed prior to every acquisition and is an integral part of the investment decision.
Buildings are only allowed to be purchased if a score of at least 2.5 is achieved. Otherwise, measures to achieve these scores must be budgeted at the time of purchase. These measures must be implemented within five years after transfer of ownership.
Along with the SI check, a mandatory environmental audit is carried out by an external service provider prior to each acquisition (including whether soil contamination might be present); the results are included in the investment decision. Furthermore, all buildings must have – if available in the country where the property is located – a valid Energy Performance Certificate, e.g. an energy certificate according to the German Energy Saving Ordinance (EnEV) or an Energy Star rating in the United States.
The SI check as well as all the other aforementioned building information is documented in the ImmoSustain system.

Consideration of ecological features in the context of portfolio management
To make a contribution to climate protection and limit the global rise in temperature to 2°C, ecological features are also taken in consideration in the context of portfolio management by applying a fundamental examination process. To do so, the company first uses the method already applied in the context of investment planning (use of the SI check).

Qualitative sustainability features
For portfolio real estate, an annual SI check is carried out and documented in the ImmoSustain system. The data is collected by the local building service providers mandated by the company for the property in question and is then validated by the Asset Management of Union Investment.
The ecological features of the property in the portfolio are reviewed and analysed based on the same seven categories upon which the SI check is also based. The evaluation of the sustainability topics and the calculation of the total score of a property in the portfolio are done according to the process already described in the context of the investment process.
In addition, environmental check lists form an integral part of the annual inspection routine at the buildings. They are helpful for hazard avoidance and safety. With measures such as the promotion of so-called green tenancy agreements in accordance with the standard of the Central Real Estate Committee (ZIA) and green property management contracts (obligation to have environmental management certified according to ISO 14.001 or a similar certification) and the promotion of sustainable tenant extensions, the existing buildings are further developed toward more sustainability. A green tenant agreement is a lease contract aimed at sustainability that is specially designed to encourage the tenant to use the property as sustainably as possible and encourage the landlord to manage the property as sustainably as possible. This is the case, for instance, when tenant agreements govern the sustainable management of a commercial property during operation; the provision of specified consumption and emission values by the tenant; as well as sustainable modernisation and other building measures for fostering a sustainable use of the property.

Quantitative sustainability features
An essential part of the analysis of the ecological features of a property in the portfolio is its emission and consumption data. The company collects and analyses the CO2 emissions (kg Co2/m2/year), the energy consumption (kWh/m2/year), water consumption (m3/m2/year) and waste (kg/m2/year) of each property. The data is automatically read by the company from utility bills and imported to the ImmoSustain system via a digital interface. CO2 emissions caused by the consumption of electricity, heating and cooling the buildings, have top priority. They are calculated per square metre and per year by the ImmoSustain system and compared to scientific data (Carbon Risk Real Estate Monitor, so-called “CRREM” data). The CRREM data take into account building classes and geographical locations and indicate whether a building is on the 2°C climate path or is making a contribution to limiting global warming to 2°C. This means, for instance, that office properties in Germany are not allowed to emit more than 67.3 kg of CO2 per m2 per year in 2030. If the CO2 emission of a building in the investment fund is higher than the CRREM 2°C climate path, measures for energy optimisation (e.g. replacement of the heating system) are derived and integrated in the annual investment plan.
A reduction in energy consumption contributes significantly to reducing CO2 emissions and thus makes a significant contribution to limiting global warming. This is why the company aims at reducing the energy consumption (kWh/m2/year) of the building in the portfolio by 10 percent by 2030. The focus of energy saving measures is to be on such buildings that do not meet the criteria for sustainable investments as defined in Regulation (EU) 2020/852 (“Taxonomy Regulation”).
For the analysis of the energy consumption of a property, energy certificates provide initial information on their energy efficiency. In addition, the consumption bills issued by the utility are entered in ImmoSustain monthly. This data shows the energy consumption per square metre for every property. In addition, an appropriate energy performance monitoring & assessment by external service providers will be introduced in nearly all buildings for a detailed analysis. It maps all technically relevant systems, analyses the energy consumption of a building and derives energy-saving measures such as the optimisation of building technology systems (cooling systems, electricity control) for the individual buildings. The consumption data (kWh/m²/year) of all buildings is consolidated and disclosed at portfolio level. It is used to determine the aforementioned goal and published on the company’s website.

Continuous development of the real estate
The ImmoSustain system enables all those involved in the process to obtain a quick and well-founded overview of the status of the sustainable development of individual buildings as well as of the portfolio as a whole. Fund management can thus take sustainability into account in a targeted manner when designing the portfolio. For this purpose, individual potentials are identified at building level as part of the analysis of the SI check and are backed up with measures to improve the overall score of the building. Taking into account the cost-effectiveness of the measures, they are then included in the annual budget planning and implemented in line with the overall strategy for a building. Measures can include, for instance, the installation of external sun protection, the purchase of green electricity or the installation of new building technology. The decision to implement measures in individual cases is made by the fund management as part of the annual investment planning. The requirement is that the portfolio as a whole achieves an average SI check score of at least 2.5.
In addition, regular checks are carried out to determine whether suitable measures can be taken to reduce a building’s CO2 emissions so as to achieve the 2° CRREM climate path. Depending on market developments and/or the fund’s performance, a process of selling a property may be initiated, if necessary.

Consideration of features of good corporate governance
No real estate is acquired whose sellers are companies that apply controversial business practices within the meaning of the principle of the UN Global Compact (UN initiative for sustainable and responsible corporate governance) or whose tenants use controversial business practices.
In the context of portfolio management, no tenancy agreements are entered into with tenants who apply controversial business practices within the meaning of the principle of the UN Global Compact (UN initiative for sustainable and responsible corporate governance).

Consideration of adverse impacts on sustainability factors

When selecting properties, the principal adverse impacts (PAIs) of these investment decisions on sustainability factors are also taken into account. Categories that can be used to determine adverse impacts on sustainability factors through investment in real estate are: fossil fuels and energy efficiency; additional climate and other environmental indicators such as the energy consumption of a building.

PAIs are taken into account specifically by (1) avoiding investments in buildings that are used to extract, store, transport or produce fossil fuels, (2) focusing on investment in energy efficient buildings (assessed using energy performance certificates), and (3) reducing the intensity of the energy consumption (kWh/sq m/year) of buildings at portfolio level.

Investment in buildings that are used to extract, store, transport or produce fossil fuels (e.g. filling stations) can only be made if they represent a minor part of the total investment in an acquisition (e.g. retail park with filling station).

In addition, as part of investment decisions and the development of existing buildings, the company is seeking to reduce the proportion of buildings in the portfolio that are not energy efficient. Roadmaps for the energy efficiency of buildings are developed and used to improve the total energy consumption (kWh/sq m/year) of buildings at portfolio level.

Information about principal adverse impacts on sustainability factors is also available in the fund’s annual report.

Change history:

01.11.2021: Initial publication

01.07.2022: Inclusion of description for considering adverse impacts on sustainability factors.

UniImmo: Global

Sustainability-related disclosure

Description of ecological features 
The company takes sustainability features into account both with the acquisition of real estate and in the context of portfolio management of real estate. Sustainability comprises ecological (environment – E) and social (social – S) criteria as well as good corporate governance (governance – G). Ecological features are, in particular, the CO2 reduction of a property as well as the consumption of energy in kWh per m2. Social features are, for example, projects that serve the common good. Good corporate governance is measured, among other things, by whether and to what extent users of the real estate apply controversial business practices within the meaning of the principles of UN Global Compact or whether their business activities are related to outlawed and controversial weapons.
For this fund, the company is pursuing an approach that is to ensure the sustainable orientation of the investment fund, in particular by taking ecological features in consideration. By allowing for ecological features, Union Investment addresses the role of buildings for achieving the Paris climate goals. With a significant reduction in CO2 emissions, the building sector can make a major contribution to achieving the climate targets. In addition, criteria of good corporate governance are taken into account in the context of the acquisition and management of real estate.
The regulatory requirements for the definition of social criteria are still under development. Against this backdrop, no social criteria are currently taken in consideration for this fund. However, both in the context of investment decisions and in the context of portfolio management, the company will regularly check to what extent it can include social criteria in its decisions.

Evaluation, measurement and monitoring of ecological features
The consideration of sustainability features constitutes an integral part of the so-called “manage to green” strategy the company has adopted to reach climate neutrality in 2050 with the aid of a package of measures.
With this strategy, a real estate portfolio is to be continuously improved in terms of sustainability and environmental soundness with regard to both investment decisions and portfolio management.
For the implementation of the “manage to green” strategy, the company has established a centralised platform – the ImmoSustain system – that is used for the evaluation, measurement and monitoring of ecological features. This system provides sustainability data on a centralised basis to control the sustainability management of the real estate.

Consideration of ecological features in the context of investment decisions
At Union Investment, investment decisions are made on the basis of a fundamental assessment process. The aim of these investments is to contribute to climate protection and limit the global rise in temperature to 2°C. To this end, the company has developed a method to define and implement measures for achieving these goals.
With the so-called sustainable investment check (SI check) developed by the company, buildings are assessed in terms of their sustainable quality on the basis of sustainability indicators prior to acquisition. The ecological features of a property are reviewed and analysed with the SI check. The SI check consists of seven categories in the areas of building automation, building shell and technology, resources, economy, user comfort, measures in operation as well as location. With this instrument both the actual condition of a building and the individual development potential of the property are ascertained and analysed.
In total, over 100 sustainability topics are analysed in the seven categories of the SI check. In category “1. Building automation”, a review is made of whether and which sensors are installed on ventilation and heating systems to control these systems efficiently. In category “2. Building shell and technology”, sustainability topics such as the proportion of green electricity, heat transfer coefficients, share of glazing and share of sun protection are analysed to derive measures for more energy efficiency and fewer greenhouse gas emissions. In category “3. Resources”, measures for water conservation and rainfall water use as well as greening measures are determined. Category “4. User comfort” comprises topics such as safety in and around the building or electric charging stations for vehicles. The efficiency of the building is determined by topics such as building geometry, flexible layout of the floor plan or diversified room typologies in category “5. Economy”. “6. Location” is the category in which the proximity to public transport, bicycle infrastructure, physical risks such as flood risks and other topics are fleshed out and followed up. Finally, in category “7. Measures in operation” an analysis is made whether building management, waste management and the selection of service providers are sustainable, for example.

The SI check data is collected by the local building service providers mandated by the company for the property in question and is then validated by the Asset Management of Union Investment.
For the evaluation of these sustainability topics, points are awarded that are added up for each category. The sum per category, weighted as a percentage, is integrated in a total score for each building. The total score is shown on a scale of 0 to 5, with 5 being the best result. The SI check is performed prior to every acquisition and is an integral part of the investment decision.
Buildings are only allowed to be purchased if a score of at least 2.5 is achieved. Otherwise, measures to achieve these scores must be budgeted at the time of purchase. These measures must be implemented within five years after transfer of ownership.
Along with the SI check, a mandatory environmental audit is carried out by an external service provider prior to each acquisition (including whether soil contamination might be present); the results are included in the investment decision. Furthermore, all buildings must have – if available in the country where the property is located – a valid Energy Performance Certificate, e.g. an energy certificate according to the German Energy Saving Ordinance (EnEV) or an Energy Star rating in the United States.
The SI check as well as all the other aforementioned building information is documented in the ImmoSustain system.

Consideration of ecological features in the context of portfolio management
To make a contribution to climate protection and limit the global rise in temperature to 2°C, ecological features are also taken in consideration in the context of portfolio management by applying a fundamental examination process. To do so, the company first uses the method already applied in the context of investment planning (use of the SI check).

Qualitative sustainability features
For portfolio real estate, an annual SI check is carried out and documented in the ImmoSustain system. The data is collected by the local building service providers mandated by the company for the property in question and is then validated by the Asset Management of Union Investment.
The ecological features of the property in the portfolio are reviewed and analysed based on the same seven categories upon which the SI check is also based. The evaluation of the sustainability topics and the calculation of the total score of a property in the portfolio are done according to the process already described in the context of the investment process.
In addition, environmental check lists form an integral part of the annual inspection routine at the buildings. They are helpful for hazard avoidance and safety. With measures such as the promotion of so-called green tenancy agreements in accordance with the standard of the Central Real Estate Committee (ZIA) and green property management contracts (obligation to have environmental management certified according to ISO 14.001 or a similar certification) and the promotion of sustainable tenant extensions, the existing buildings are further developed toward more sustainability. A green tenant agreement is a lease contract aimed at sustainability that is specially designed to encourage the tenant to use the property as sustainably as possible and encourage the landlord to manage the property as sustainably as possible. This is the case, for instance, when tenant agreements govern the sustainable management of a commercial property during operation; the provision of specified consumption and emission values by the tenant; as well as sustainable modernisation and other building measures for fostering a sustainable use of the property.

Quantitative sustainability features
An essential part of the analysis of the ecological features of a property in the portfolio is its emission and consumption data. The company collects and analyses the CO2 emissions (kg Co2/m2/year), the energy consumption (kWh/m2/year), water consumption (m3/m2/year) and waste (kg/m2/year) of each property. The data is automatically read by the company from utility bills and imported to the ImmoSustain system via a digital interface. CO2 emissions caused by the consumption of electricity, heating and cooling the buildings, have top priority. They are calculated per square metre and per year by the ImmoSustain system and compared to scientific data (Carbon Risk Real Estate Monitor, so-called “CRREM” data). The CRREM data take into account building classes and geographical locations and indicate whether a building is on the 2°C climate path or is making a contribution to limiting global warming to 2°C. This means, for instance, that office properties in Germany are not allowed to emit more than 67.3 kg of CO2 per m2 per year in 2030. If the CO2 emission of a building in the investment fund is higher than the CRREM 2°C climate path, measures for energy optimisation (e.g. replacement of the heating system) are derived and integrated in the annual investment plan.
A reduction in energy consumption contributes significantly to reducing CO2 emissions and thus makes a significant contribution to limiting global warming. This is why the company aims at reducing the energy consumption (kWh/m2/year) of the building in the portfolio by 10 percent by 2030. The focus of energy saving measures is to be on such buildings that do not meet the criteria for sustainable investments as defined in Regulation (EU) 2020/852 (“Taxonomy Regulation”).
For the analysis of the energy consumption of a property, energy certificates provide initial information on their energy efficiency. In addition, the consumption bills issued by the utility are entered in ImmoSustain monthly. This data shows the energy consumption per square metre for every property. In addition, an appropriate energy performance monitoring & assessment by external service providers will be introduced in nearly all buildings for a detailed analysis. It maps all technically relevant systems, analyses the energy consumption of a building and derives energy-saving measures such as the optimisation of building technology systems (cooling systems, electricity control) for the individual buildings. The consumption data (kWh/m²/year) of all buildings is consolidated and disclosed at portfolio level. It is used to determine the aforementioned goal and published on the company’s website.

Continuous development of the real estate
The ImmoSustain system enables all those involved in the process to obtain a quick and well-founded overview of the status of the sustainable development of individual buildings as well as of the portfolio as a whole. Fund management can thus take sustainability into account in a targeted manner when designing the portfolio. For this purpose, individual potentials are identified at building level as part of the analysis of the SI check and are backed up with measures to improve the overall score of the building. Taking into account the cost-effectiveness of the measures, they are then included in the annual budget planning and implemented in line with the overall strategy for a building. Measures can include, for instance, the installation of external sun protection, the purchase of green electricity or the installation of new building technology. The decision to implement measures in individual cases is made by the fund management as part of the annual investment planning. The requirement is that the portfolio as a whole achieves an average SI check score of at least 2.5.
In addition, regular checks are carried out to determine whether suitable measures can be taken to reduce a building’s CO2 emissions so as to achieve the 2° CRREM climate path. Depending on market developments and/or the fund’s performance, a process of selling a property may be initiated, if necessary.

Consideration of features of good corporate governance
No real estate is acquired whose sellers are companies that apply controversial business practices within the meaning of the principle of the UN Global Compact (UN initiative for sustainable and responsible corporate governance) or whose tenants use controversial business practices.
In the context of portfolio management, no tenancy agreements are entered into with tenants who apply controversial business practices within the meaning of the principle of the UN Global Compact (UN initiative for sustainable and responsible corporate governance).

Consideration of adverse impacts on sustainability factors

When selecting properties, the principal adverse impacts (PAIs) of these investment decisions on sustainability factors are also taken into account. Categories that can be used to determine adverse impacts on sustainability factors through investment in real estate are: fossil fuels and energy efficiency; additional climate and other environmental indicators such as the energy consumption of a building.

PAIs are taken into account specifically by (1) avoiding investments in buildings that are used to extract, store, transport or produce fossil fuels, (2) focusing on investment in energy efficient buildings (assessed using energy performance certificates), and (3) reducing the intensity of the energy consumption (kWh/sq m/year) of buildings at portfolio level.

Investment in buildings that are used to extract, store, transport or produce fossil fuels (e.g. filling stations) can only be made if they represent a minor part of the total investment in an acquisition (e.g. retail park with filling station).

In addition, as part of investment decisions and the development of existing buildings, the company is seeking to reduce the proportion of buildings in the portfolio that are not energy efficient. Roadmaps for the energy efficiency of buildings are developed and used to improve the total energy consumption (kWh/sq m/year) of buildings at portfolio level.

Information about principal adverse impacts on sustainability factors is also available in the fund’s annual report.

Change history:

01.11.2021: Initial publication

01.07.2022: Inclusion of description for considering adverse impacts on sustainability factors.

To the sustainability portal of Union Investment