Union Investment Real Estate’s open-end fund has acquired a newly constructed 195,000sqft office asset in Sunnyvale, California.

The manager’s Unilmmo Europa fund has bought The Catalyst office building. Public records have revealed that the asset was acquired for $222m (€220.5m).

Hamburg-based real estate investment manager Union Investment returned to investing in US real estate late last year following a three-year hiatus. Union Investment’s US portfolio now comprises 34 properties valued at around €6.7bn.

Matthew Scholl, executive director and head of investment management Americas at Union Investment, said: “The Catalyst, our second acquisition in the Silicon Valley, fits extremely well within our continued US growth story. Sunnyvale is a very attractive location situated within the valley, benefiting from its close proximity to the other desirable, but more expensive, submarkets of Palo Alto and Menlo Park.

“Sunnyvale also benefits from its adjacency to Stanford University, Santa Clara University as well as San Jose State, all of which offer Silicon Valley employers highly sought-after tech talent. As tech companies continue to redefine and optimise their post-pandemic office needs, we anticipate vacancy rates in Sunnyvale to fall further in the near term and office rents are set to rise.”

Willis Kim, vice president and head of US West Coast and Canada at Union Investment, said The Catalyst building ”is truly a best-in-class office property with a focus on sustainability and wellness”.

”Along with the outstanding credit profile and lease term of the tenant, these ESG attributes made The Catalyst particularly attractive for UniImmo: Europa,” Kim said.

To read the latest edition of the latest IPE Real Assets magazine click here.