Union Investment broadens housing business with micro-apartments fund

Soon after launching its first housing fund, Germany’s Union Investment has entered the micro-living segment, buying an apartment complex in Austria.

The Milestone Graz complex, which contains 378 fully-furnished student apartments, has been purchased for a micro-apartment-focused institutional fund, Urban Living Nr 1.

Alejandro Obermeyer, head of investment management for the DACH region at Union Investment Real Estate, said: “Graz is one of the fastest growing conurbations in Austria and a university city with long-term demand for stylish, high-spec apartments with additional services.”

Last week, Union announced it had raised €620m from investors for its first residential fund, UniImmo Wohnen ZB, which it launched earlier this year alongside ZBI Zentral Boden Immobilien.

The firm said there were more than 60,000 students in Graz — the second largest city in Austria after Vienna — but only around 5,750 places available in student hostels at the moment.

The micro-apartment property is let on a long-term lease to private student accommodation provider Milestone.

The apartments are between 20sqm and 28sqm in size and the eight-storey complex has communal areas, such as a music room, study areas and a fitness room.

The complex has an ÖGNI sustainability rating of Platinum, with the building’s features including a solar system on the roof, water-saving fixtures, LED lights and key switches.