Union Investment Real Estate GmbH sees potential for added value in its €7 bln portfolio of shopping centres and aims to leverage the available opportunities through active asset management. The company is thus planning a new build comprising around 18,540 m² of rental space for the Riem Arcades complex in eastern Munich, marking a substantial expansion of the urban ensemble, which was opened in 2004. A planning application for the project will be submitted by the end of 2015. The chosen location is a 4,000 m² site to the west of Riem Arcades. The new build also represents the completion of the wider development, which includes offices, apartments and the Novotel Munich Messe in addition to a shopping centre with 128 stores. The intention is to integrate the new building into the existing Riem Arcades complex via a portico – a steel-roofed structure 22 m high and 150 m long that will link the Novotel hotel to the new building and create a new entrance to the ensemble.
Union Investment is aiming for an appropriate mix of hotel and retail space in the new build and the planned space is already 80% pre-let. A 25-year lease was signed with Motel One at EXPO REAL in Munich. The successful budget design hotel brand will operate a 311-room hotel across some 8,660 m² at Riem Arcades. Two financially strong partners have already been secured for the new retail space who will help to boost the attractiveness of Riem Arcades as a shopping destination. Out of the total of 9,880 m² of retail space, Union Investment is also planning to lease a large area to a sports equipment manufacturer.
“Thanks to a blend of diversification and far-sighted planning, Riem Arcades have been a major source of stability in our Unilmmo: Deutschland fund portfolio for over a decade,” said Volker Noack, a member of the management team at Hamburg-based Union Investment Real Estate GmbH. “Adding a second hotel on a long-term lease alongside the very successful Novotel places Riem Arcades on an even broader footing.” The Riem neighbourhood, with the Riem Arcades shopping centre as its centrepiece, has proved to be a hugely successful development in the decade since it was built. “Demand for space is exceptionally high and we are confident that the space will be fully let by the time the project is completed,” said Volker Noack.
Source: Union Investment
