21 December 2021
Union Investment records strong growth in institutional real estate business
• Fund assets across institutional real estate solutions up by more than 19 % in 2021
• Capital commitments of over EUR 2 billion acquired
Union Investment significantly expanded its business with institutional real estate funds, club funds and Service KVG mandates in 2021. Real estate assets under management in institutional products grew by more than 19 per cent in the current financial year and now total EUR 17.1 billion (as at 30 November 2021). Between January and November, Union Investment acquired capital commitments totalling more than EUR 2 billion from institutional real estate investors.
In particular, individual real estate solutions for cooperative institutes and for major customers saw further expansion. The solution portfolio for Union Investment’s institutional customers now comprises 36 products, including 20 Service KVG mandates. By gaining new mandates and extending existing ones, investment assets in the Service KVG mandate segment grew by around 9.3 per cent compared to 2020, totalling EUR 9.54 billion as at 30 November 2021.
Union Investment realised its first individual mandate in 2021 with the Bayerische Versorgungskammer (BVK). By way of a new investment management company set up and managed by Union Investment, the BVK has taken a 50 per cent stake in an office development project in Munich which is already let on a long-term lease to the German Patent and Trade Mark Office. Almost EUR 400 million was raised in 2021 for a logistics solution for institutional investors, with Union Investment’s customer base also being expanded. The subscribers include churches, pension funds and pension schemes.
Union Investment was also successful in terms of acquisitions in 2021. As at 30 November, properties worth around EUR 1.7 billion had been acquired for institutional products alone. The most notable new purchases include the head office of shipping company Hamburg-Süd in Hamburg, the Cäcilium office building in Cologne, the office property at 5–7 Avenue du Coq in Paris and the Astro Tower in Brussels. Acquired for the UniInstitutional European Real Estate fund, the latter office building is fully let to a public sector tenant for 21 years.
The institutional part of Union Investment’s business is set for further growth in 2022:
“We see very stable growth momentum here. Demand for real estate solutions remains high. In addition to expanding our existing activities and Service KVG business, we’re currently preparing to place five or six new real estate solutions. These solutions will involve expanding our investment spectrum by adding new investment styles and property types.”
Maximilian Brauers, Management Board member at Union Investment Institutional Property GmbH
For Union Investment Institutional Property GmbH