Mühlena with team

Adding value in every phase of the property lifecycle

Strong demand for real estate has increasingly caused investors to acquire properties off market and during the early stages of a project. At the same time, there is also significant untapped value potential in the existing building stock, which can be exploited through refurbishment, remodelling or extension work.

Forward-looking planning for sustainable properties

A property's lifecycle starts at the development stage, which has a major impact on its economic success. The ongoing development of existing properties also places specific demands on an asset manager. At Union Investment, a 37-strong unit supports the full range of planning and construction activities. These specialists use our proprietary Sustainable Investment Check tool to assess the financial, ecological and social credentials of every property prior to purchase. In addition to routine maintenance, Union Investment also invests significant amounts to ensure that the properties in its portfolio remain competitive. To this end, it is not unusual for a single-tenant property to be converted into a multi-tenant building or for a shopping centre to be Extended.

“Good building performance doesn’t just happen. The technical specification and services are a major driver of value. We ensure the highest quality standards are met in this regard, both at the time of acquisition and throughout the entire holding period.”

Bent Mühlena, Head of Real Estate Project Management, Union Investment Real Estate GmbH

Upgrading existing holdings

26.9 mn. €

Investment by Union Investment in upgrading and remodelling in 2016

Inefficient floor plans, outdated technology and excessive water or energy consumption are all factors that can render older properties uncompetitive. We carry out detailed analysis of such buildings and consider the options. For properties in prime locations in particular, this is currently the ideal time for refurbishment across many markets. Our project management team ensures that impractical floor plans are transformed and single-tenant properties are converted into multi-tenant buildings. This often involves the creation of additional rental space, while building services are almost always renewed. Building management systems may be replaced, more efficient heating and cooling systems installed or investment made in the user experience. All these aspects increase the property's attractiveness and make re-letting easier.

An overview of current upgrading projects

Malesherbes Paris

Malesherbes

Paris

Malesherbes: The office building was built in 1960 and has been fully refurbished since its main tenant moved out. Union Investment is investing around €27 million in the project.
 

2400x1350_Seestern_-14_terrasse_abend

SEESTERN 3

Düsseldorf

Seestern: The former headquarters of the department store Horten at the Seestern was fully modernised in 2014/2015 in keeping with its status as a listed building. In September, the entire space will be leased to Deutsche Telekom. 
 

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New build Riem Arcaden, Munich

Munich

The urban quarter Riem Arcaden in der Messestadt is currently gaining 18,540 square metres of floor space. Alongside a Motel One hotel, new tenants include the German retail giant Peek & Cloppenburg. Building will be complete in spring 2018.
 

Hilton Muenchen

Hilton Munich City

Munich

Hilton Munich City, set in the old traditional quarter of Haidhausen, is currently being modernised while the hotel remains open for business. With 490 bedrooms, it is one of the largest hotels in Union Investment’s portfolio.

How you benefit

As an experienced portfolio holder, we know how important state-of-the-art building facilities are for the value and future viability of a property. Fortunately, as an equity-rich investor we are able to make ongoing investments in our high-quality portfolio of properties, thereby securing the long-term viability of the office, hotel, retail, logistics and residential properties held in our funds. Which delivers real benefits for you.

  • We deliver investment security for our tenants. Our buildings adapt to changing user requirements. Major projects such as remodelling and extension work are a standard feature of our operations.

  • There is no backlog of maintenance work in our properties, and they consistently meet high quality standards. As such, they are also attractive to future purchasers.

  • Our investors benefit from the sustained, reliable returns delivered by our properties. We continue to invest to ensure that this remains the case.

Best Practices

  • Finsbury Circus, London

    Finsbury Circus, London

    With the repositioning of this office property, acquired in 1992, the demand for energy-efficient core real estate has been met in one of the best locations in the City of London. Previously vacant, the property is now fully leased. The restructuring has also created additional rent space.

    Les Grands Prés, Mons

    Les Grands Prés, Mons

    For the Union Investment Asset Management Team, IKEA’s decision in 2012 to open a 35,000-square metre store directly adjacent to the existing shopping centre was the crucial factor in the expansion project.

    EMPORIO Hamburg

    EMPORIO, Hamburg

    The EMPORIO Tower is one of Hamburg's architectural landmarks. When Unilever moved headquarters in mid-2009, one of Europe's most ambitious revitalisation projects began. As a multi-tenant property, EMPORIO is now once again fully leased.

  • Central Seine Paris

    Central Seine, Paris

    Union Investment used the moving out of a lessee from the Central Seine office building in Paris after more than ten years as an opportunity to improve the asset. The intensive renovation measures have paid off: the building now has HQE Excellent certification.

    600 13th Street, Washington

    600 13th Street, Washington

    The building at 600 13th Street N.W. near the White House comprises 22,816 sq m of office and retail space and underwent comprehensive upgrading by Union Investment after the anchor tenant, who had occupied some 89 per cent of the total space, moved out in November 2012. The building was then repositioned in the Washington market.

    Puro München

    PURO, Munich

    The PURO building complex on Adalperostrasse has been successfully repositioned as a higher standard property on the Munich office property market, thanks to a comprehensive revitalisation and integrated marketing and communications strategy.

Forward deals in all their forms

Acquiring projects allows us to ensure that new purchases meet our specific requirements with regard to technical specification. Using our technical expertise, we also make sure that buildings are energy efficient and will contribute to the ongoing development of our portfolio in terms of ecological, sociocultural and commercial sustainability. By regularly acquiring new builds with high construction standards, our Acquiring projects allows us to ensure that new purchases meet our specific requirements with regard to technical specification. Using our technical expertise, we also make sure that buildings are energy efficient and will contribute to the ongoing development of our portfolio in terms of ecological, sociocultural and commercial sustainability. By regularly acquiring new builds with high construction standards, our real estate holdings remain young and attractive. Which delivers real benefits for you.

  • Our strong capital resources provide developers with a high degree of reliability and financial security.
  • As an architect, planner or project manager, you work with us on an equal professional footing. Efficient, proven processes offer maximum dependability.
  • The sustainable quality of our real estate portfolio is reflected in the high occupancy levels across our open-ended real estate funds.

Forward Funding

A central pillar of our investment strategy

The acquisition of development projects by way of forward funding has been one of Union Investment's core competences for many years. Some current examples are listed here.

Grand Central, Paris

Grand Central, Paris

The speculative Grand Central project is located at Saint-Lazare station in the heart of Paris. The modern business quarter being developed by the Carlyle Group comprises 20,100 sq m of office and retail space, three entrance lobbies, two restaurants, a bar and an auditorium that will be accessible to the public. Special features of the project designed by Jacques Ferrier Architecture include a public promenade, several terraces comprising a total of 2,000 sq m and a green roof that can be used for agricultural purposes.

Dublin


Vertium, Dublin

The Vertium office project currently under construction in Dublin's business district was purchased without pre-letting. Upon completion, it will offer approximately 15,970 sq m of office rental space across five storeys plus 95 car parking spaces. The building will have high-quality facilities and meet the requirements for international Grade A status. Completion and handover of the property to the tenant is scheduled for the summer of 2017. An LEED green building rating of Gold will be sought for Vertium.

Königstraße 27/27a, Stuttgart

Königstraße 27, 27a, Stuttgart

The former Karstadt department store building in Stuttgart's pedestrian zone is currently being repositioned. Five of the nine storeys in the building are dedicated to sales space, with office space planned for the top two floors.
The project is scheduled for completion at the end of 2017. The building is expected to receive LEED Gold certification for its sustainable refurbishment.
 

XYZ

XYZ Building, Manchester

Acquired at the project stage, the XYZ Building is a Grade A office property located in Spinningfields, one of the UK’s most successful new business districts. XYZ is now completed and is fully let. The tenants are mostly companies from the IT and telecommunications sectors. Thanks to the high standard of the building and its high level of energy efficiency, XYZ has received a BREAM Excellent Rating.

Forward Purchase

Vor allem bei der Akquisition von Hotelprojekten setzen wir auf Forward Purchase-Modelle. Erfahren Sie mehr über unsere aktuellsten Projekte.

IHK Muenchen

IHK, München

Union Investment secured the planned office and training facility of the local Chamber of Industry and Commerce (IHK) in the Haidhausen district of Munich at an early stage. The new build development comprises some 10,000 sq m of rental space and 80 parking spaces and is already fully let to IHK Munich/Upper Bavaria. Commissioning is scheduled for the beginning of 2019.

Holiday Inn Warschau

Holiday Inn, Warsaw

The sale and purchase agreement for the Warsaw Holiday Inn, which enjoys an excellent city centre location, was signed before construction even began. Building work commenced in the first quarter of 2016 and the hotel is scheduled to open in the first quarter of 2018. Its architecture was inspired by New York's Flatiron Building. In keeping with the high environmental standards of Union Investment and UBM, the hotel will be realised as a green building, with LEED Gold certification being sought. It will also be the first Holiday Inn to be constructed in accordance with the open lobby concept, whereby reception, the lobby, business centre, bar and restaurant are all on the ground floor in an open plan Arrangement.

QBC

QBC 3, Vienna

UBM Development AG and S Immo AG are the joint developers behind the Quartier Belvedere Central (QBC) scheme at Vienna’s main station. With its mix of offices, hotels and apartments, a new district is being built close to Vienna's city centre on a total of six sites. The office space in QBC 3 has been acquired by Union Investment by way of a forward share deal. QBC 3 provides tenants with 7,600 sq m of space and a total of eight office floors. Retail space and restaurants take up the ground floor. At this early stage, approximately 30 per cent of the space is already let and a further 53 per cent is pre-let.

HH Airport

Holiday Inn City Nord, Hamburg

Union Investment secured the new Holiday Inn City Nord, which is currently still at the development phase, on behalf of an institutional thematic fund. The four-star hotel is the tallest building in the City Nord district and will offer 300 rooms across 18 floors. The hotel will have a total area of some 13,500 sq m. It will be leased and operated by Realotel Hamburg Betriebs GmbH, a subsidiary of Bierwirth & Kluth Hotel Management GmbH, which has entered into a franchise agreement with the InterContinental Hotels Group.

Hyatt Place Frankfurt Airport

Hyatt Place Frankfurt Airport, Frankfurt

This striking new build will comprise 312 rooms, approximately 110 underground parking spaces and two shops across some 19,000 sq m of space. The Gateway Gardens suburban rail station, which is currently under construction, is situated directly in front of the hotel. The Feuring Group will operate the hotel as lessee for the next 30 years under the Hyatt Place brand. Completion of the first Hyatt Place hotel in Germany is scheduled for the first quarter of 2018.

BIM – the future of construction

Digital planning processes make the planning, construction and operation of properties simpler, more transparent and cheaper. For most German players, techniques such as building information modelling (BIM) are still very much uncharted territory, but there is mounting pressure to innovate. In future, new buildings without a digital prototype will be a rarity.

The following may also be of interest

RAUM&mehr-Beitrag "Die Königsdisziplin".

Places & spaces article

Read more about keeping office buildings young in our places&spaces article.

Nachhaltigkeit

In the spotlight: Sustainability

Sustainable real estate investment seeks to ensure long-term value appreciation. As such, it is driven by clear financial criteria, but the benefits for the environment and society are also crucial aspects of sustainability.