Our solutions for institutional investors

Responsible investment is the main fiduciary duty of an asset manager towards investors. Given the current political environment, with continued low interest rates and many real estate markets in a late stage of the cycle, a forward-looking strategy is key.

Our long-standing expertise
 

€ 17.6 billion

Amount invested in our institutional real estate solutions

Union Investment has been active in the institutional real estate sector since 1977. Our customers have benefited throughout from our deep expertise and management skill in the various real estate markets. Choosing Union Investment means choosing the professionalism, outstanding client focus and strong solution-orientation of one of Europe's leading asset managers.

Assets under management in institutional real estate solutions total EUR 17.6 bilion, split between actively managed funds (around EUR 9.0 billion) and Service KVG mandates (around EUR 8.6 billion). Our 37 institutional real estate funds and other vehicles together hold 503 properties.

Business segments

We provide tailored real estate product solutions and modular service packages compliant with either German or Luxembourg law, ranging from broadly diversified funds to purely administrative vehicles:

Feest en Cultuurpaleis

Funds

Open-ended and closed-ended real estate funds for institutional investors.

Individual mandates

Tailored solutions

Individual mandates, club deals and joint ventures for institutional Investors.

Service KVG mandates

Service KVG mandates

Administrative services in conjunction with third-party asset managers.

Our expertise

We are committed to fulfilling the varying requirements of institutional clients and leveraging our expertise to ensure that both individual client wishes and regulatory requirements are met. The starting point is always a personal discussion with the investor.

Property types

ATMOS, Munich

Offices

We focus on office properties in excellent locations and with high construction quality, but our acquisition planning also includes real estate in secondary locations, subject to meeting our criteria.

Alexa, Berlin

Retail

As one of the largest property holders in our peer group, we have the whole spectrum of retail properties worldwide in our sights, from retail/commercial buildings and retail parks through to shopping centres.

Radisson Blue, London Stansted

Hotels

We have been investing in hotels for over 40 years. Today, our broadly diversified hotel portfolio makes us one of the leading European investment managers for hotel real estate. We are among the largest holders of hotels in our peer group.

Amazon, Bad Hersfeld

Logistics

Excellent locations, good alternative use options and long-term rental income make logistics properties attractive, which is why we include them in our portfolios.

Residential

Residential

We have added another attractive use type in recent years, namely residential property. Within this category, we focus on apartments, student accommodation and micro apartments.

Formats & vehicles

From standard solutions to tailored structuring requirements, our product landscape comprises open-ended and closed-ended vehicles under German or Luxembourg law for one or more investors (e.g. limited partnerships (Investment KG), special AIFs, SICAV-SIFs).

Alongside traditional regulated funds, we also offer more recent structures, such as the Luxembourg Reserved Alternative Investment Fund (RAIF). As an institutional client, you benefit from our high level of structuring expertise and long experience of regulatory matters.

Processes

As one of the largest and oldest investment management companies in the real estate segment, our competitive advantage lies in the quality of our systems and processes across all areas of real estate management, fund management and risk management. This includes the following interfaces and processes:

  • in real estate management: in particular the acquisition and sale process, asset management, property management and project management of development projects
  • in fund management: performance management, liquidity management and planning, portfolio analysis and fund monitoring
  • in risk management: ongoing checking and monitoring of a fund’s main parameters

Fund management

The fund management team bears overall responsibility for fulfilling our product promise and for fund performance. To this end, alongside its operational and strategic functions, fund management also makes content decisions in conjunction with the respective departments.

The core fund management processes are:

  • Determining the fund strategy and risk strategy
  • Managing fund planning
  • Fund and risk management
  • Fund reporting (internal, legal and investor reporting) 
Graphic Overarching fund management

Investment management

As the so-called “deal captain”, the investment management team drives the transaction process. It is responsible for sourcing real estate in accordance with fund management requirements, it forms the interface to the individual departments and decision-making bodies and is in charge of delivering acquisitions. The following core strengths help to ensure strong execution:

  • Excellent relationships with the key developers and property holders in the real estate industry, established over many years
  • Deep market penetration and off-market opportunities due to market position as a substantial property holder
  • As one of the most active real estate managers in the market, we have a steady deal flow
  • We benefit from our reputation as a professional and reliable transaction partner
  • We are valued as an active asset manager that focuses on core/core-plus investments with commercially sustainable product quality

Asset management

Management of our property holdings is the responsibility of the asset management team, which is organised by country, region and sector. Asset management involves active management across the entire investment cycle of the individual property. This includes:

  • Strategic alignment of the individual asset (short, medium and long term; exit strategy)
  • Direct contact with the tenant through active lettings management
  • Managing the external property manager (commercial building management, rent collection and invoicing)
  • Managing the facility manager (technical property management, caretaker services, managing building services maintenance)

Risk management

Risk management is divided for organisational purposes into risk management and risk monitoring. Risk management is handled by fund management and risk monitoring by a dedicated real estate risk monitoring unit. The latter is independent of risk management, thereby ensuring the required legal separation of the two functions.

The Union Investment Group's real estate risk monitoring unit brings together all risk monitoring tasks related to the real estate process. There is a special focus on meeting the requirements of institutional investors. This comprises comprehensive checking of legal and contractual investment limits, an early warning system specific to each fund, sophisticated risk quantification techniques for the various risk types and their aggregation, and finally the carrying out of stress tests. This risk analysis is included in the regular risk reports for fund management. In addition, the real estate risk monitoring unit also determines the necessary risk metrics for institutional investors, especially for regulatory MaRisk reporting by investors in the banking sector.

Research

Our research team can draw on decades of real estate market experience across multiple cycles. Its ongoing analysis covers 26 international real estate markets in Europe, Asia and the Americas. This activity includes preparing forecasts and associated market recommendations. The focus is on office, retail, logistics and hotel properties. Additionally, the residential real estate markets in Germany and Europe are closely monitored.

The situation in potential investment locations to which we currently have no exposure is likewise tracked. Furthermore, the team explores issues such as demographics and cycle analysis which have medium to long-term effects on the real estate markets.

Sustainability management

Union Investment believes that sustainability and business success are inextricably linked. The Group-wide introduction of our Responsible Investment Policy means that sustainability considerations are firmly embedded in Union Investment’s investment processes.

Union Investment's sustainability management is based on the following principles:

  • The United Nations' Principles for Responsible Investment (UN PRI)
  • Sustainability Code for the real estate industry (ZIA – German Property Federation)

In order to achieve a sustainable portfolio design, we use specific tools to measure and analyse quantitative and qualitative data, and identify and implement potentials. These tools include:

  • the Portfolio Sustainability Management System
  • the Sustainable Investment Check
  • Green leases (i.e. featuring clauses on sustainability), which Union Investment is continually integrating in its portfolio
  • Participation in rating initiatives such as Scope and GRESB (Global Real Estate Sustainability Benchmark) for an external assessment of the sustainability performance of our real estate funds

More on sustainability:

Reporting

We provide professional reporting. The scope and level of detail can be defined for each individual client based on their requirements. Examples of reports include in particular:

  • Regulatory reports (e.g. MaRisk report, CRR report, GroMiKV (German regulation on large exposures and loans) report, Solvency II reporting, VAG (German Insurance Supervision Act) reporting)
  • Fund reports (e.g. factsheet, monthly report, semi-annual report, annual report)
  • Tax reports (e.g. taxation assessment principles (report pursuant to Section 5 of the German Investment Tax Act); tax reconciliation and offsetting of taxable income)
  • Further information based on specific requirements (e.g. brief overviews, fund price time series, complete statement of assets or additional individual evaluations as requested by the client)

Awards and ratings

We are delighted by the regular awards and top ratings we receive for real estate management, portfolio management and customer service:

Associations and institutions

Union Investment has an excellent market presence, a strong network and extensive industry contacts. The company also offers clear competitive advantages in terms of market penetration, industry perception and visibility.

The following overview shows Union Investment’s close ties with selected international associations and organisations. We actively contribute to a number of bodies, as a member and participant, to develop standards and drive progress in other areas.

  • Logo BVI

    BVI – German Investment and Asset Management Association (Bundesverband Investment und Asset Management e.V.)

    BVI is an association of investment companies founded in 1970 that works to establish uniform standards, among other things. Union Investment has been an active member for many years.

  • Logo ZIA

    ZIA – German Property Federation (Zentraler Immobilien Ausschuss)

    The ZIA is the only association that brings together the property and capital markets. As a ZIA member, Union Investment also contributes to increasing transparency and professionalism in the property industry and improving the industry's image.

  • Logo DGNB

    DGNB – German Sustainable Building Council (Deutsche Gesellschaft für Nachhaltiges Bauen e.V.)

    The DGNB was founded in 2007 and is the largest and most important sustainability organisation in the German real estate industry. Union Investment is among the founding members.

  • Logo ULI

    ULI - Urban Land Institute

    As a member of ULI Europe, Union Investment advocates responsible urban and regional planning and supports the training and continued professional development of young employees and real estate managers.

  • Logo AFIRE

    AFIRE – Association of Foreign Investors in Real Estate

    AFIRE members have a shared interest in maintaining and promoting cross-border real estate investment. As the official voice of the foreign real estate industry in the United States, AFIRE has represented the interests of more than 200 investing organisations worldwide since 1988.

  • Logo RICS

    RICS - Royal Institution of Chartered Surveyors

    RICS promotes and establishes the highest professional qualifications and standards in property development and management, construction and infrastructure. Union Investment is a member of this British professional association, which was founded back in 1868.

  • Logo gif

    gif – Society of Property Researchers

    The gif promotes research and teaching in the real estate industry. It builds bridges between the academic and business worlds, creates standards to boost market transparency and helps drive the professionalisation of the industry.

Your contact

Bastian Pütz

Would you like to know more about our institutional real estate solutions? Just give me a call. I look forward to hearing from you.

View contact information

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 risks (for mandates managed by Union Investment)

The following description explains how sustainability risks are handled for the investment funds managed by Union Investment Institutional Property GmbH (LEI 529900AVKTTLJSX76Y76), for which the Union Investment Group is solely responsible for management. 
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

Treatment of sustainability risks (for mandates managed by Union Investment and external partner(s))

The following description explains how sustainability risks are handled for the investment funds managed by Union Investment Institutional Property GmbH (LEI 529900AVKTTLJSX76Y76), for which parts of the management are outsourced to external managers. 
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.

The integration of sustainability factors into the fundamental assessment process is guaranteed. Union Investment 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. 

II. Incorporating sustainability risks into investment decisions

Union Investment analyses 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. 

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 Institutional Property GmbH (LEI Nummer: 529900AVKTTLJSX76Y76)

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.

Change history:

10.03.2021: Initial publication

30.06.2021: As of 30 June 2021, the company considers the main adverse impacts of investment decisions on sustainability factors as part of its investment decisions.

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

  • UniInstitutional European Real Estate
  • UniInstitutional German Real Estate

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

UniInstitutional European Real Estate

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.

UniInstitutional German Real Estate

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