Union Investment has acquired the first two properties in Germany for its UniInstitutional German Real Estate fund. The office properties, which are located in Darmstadt and Frankfurt am Main, reflect the target structure of the open-ended real estate fund, which was established in October 2012. The fund invests solely in Germany, focusing on smaller properties worth between €15 and 50 million. Established to meet the investment needs of banks, churches and foundations, UniInstitutional German Real Estate aims for broad diversification in terms of usage and region. “We are also looking to make purchases for the fund in mid-sized German towns. These often have the advantage of higher initial returns,” said Dr. Christoph Schumacher, a member of the management team at Union Investment Institutional Property GmbH. The company, which specializes in institutional real estate, is part of the Union Investment Group and responsible for fund management of the new product.
The first acquisition is the Space 20 office property in Darmstadt, where the vendor is a property company established by STRABAG Real Estate GmbH. Completed in 2012, the office new build offers rental space of 7,314 m². The multi-tenant building, which has been awarded DGNB ‘Silver’ certification for its sustainable construction, is located in a good office location (Robert-Bosch-Straße) in Darmstadt’s European Quarter, just a short distance from the main railway station. The building is fully let. Colliers Frankfurt advised STRABAG Real Estate GmbH on the transaction.
The second addition is a centrally located office building at Karlstraße 4-6/Moselstraße 54/Niddastraße 53, in the immediate vicinity of Frankfurt's main railway station. Finished in 2006 and comprising a total of 16,131 m² of office, retail and food service space, the building is fully let on long-term leases. The main tenant is the highly creditworthy Deutsche Bahn AG. The seller is TMW Pramerica Property Investment GmbH. Jones Lang LaSalle advised Union Investment on the deal.
On its launch date (17 October 2012), UniInstitutional German Real Estate was oversubscribed by a factor of three within five hours. In anticipation of the high level of interest, the capital inflow was deliberately limited. To ensure a broadly diversified investor base from the start, each investor was only able to subscribe a maximum of €2 million worth of units. The minimum investment amount for the fund is €500,000. “We will accept more requests for subscription for the fund as soon as the first tranche has been invested in attractive properties that can be expected to retain their value. These first two transactions have got us off to a very good start,” said Schumacher.