Union Investment achieves strong letting performance in first half of 2019

Office lettings traditionally comprise the largest share of Union Investment’s portfolio and accounted for approximately 156,000 sq m. Due to the existing high occupancy levels in the German portfolio, the domestic market was dominated by small-scale lettings. Following the largest letting of 9,500 sq m in the TM50 property in Nuremberg to the State of Bavaria, there were lettings in Park.Gate Munich of 2,500 sq m and approximately 2,000 sq m to Ada Health in Berlin.

Office leases for significant amounts of space were mainly agreed in other European markets, including the successful renewal of a lease with Swisscom for 20,500 sq m in the Fifty-One property in Zurich. Two notable follow-on leases were signed in Luxembourg and in the Paris area. KPMG will occupy around 8,500 sq m of office space in the K2 Ellipse and K2 Forte buildings in Luxembourg, while Union Investment let approximately 7,800 sq m in an existing building in the Parisian sub-market of Bois-Colombes. Another letting success in France was achieved at the recently completed Ekla Business office property in Lille. Approximately 8,800 sq m or some 60 per cent of the space in the property, which Union Investment acquired as a development project without any preletting, has been taken by a local company.

Union Investment’s office space outside Europe is likewise in high demand. In Shibuya Prime Plaza in Tokyo, some 4,800 sq m were let to IT service provider NTT Data. US office markets contributed approximately 21,000 sq m in lettings. Especially notable here are lease renewals with DLA Piper in the 555 Mission Street property, San Francisco, as well as with Stanley Black & Decker and GSA Homeland Security in Ten 10th Street, Atlanta. A further 11,000 sq m of office space lettings were agreed in Mexico City.

Accounting for approximately 103,000 sq m across five locations, logistics properties made an exceptional contribution to the latest results, as did hotels, which accounted for approximately 81,000 sq m of lettings. Union Investment’s Asset Management Hospitality team was able to agree a 30-year extension to the lease covering the 68,000 sq m of the InterContinental Hotel in Berlin, among other successes.

In the retail segment, too, which accounted for 89,000 sq m, successful lease renewals with established existing tenants were the main story. In Germany, for example, this included Saturn retaining 4,500 sq m in Rathaus Galerie Leverkusen and large fashion chains such as Zara occupying 3,700 sq m of rental space in LAGO Konstanz and C&A using 2,700 sq m in Köln Arcaden. Approximately 56 per cent of all lettings in retail were in locations outside Germany.