Amundi confirmed as buyer of €1b office portfolio from Union Investment

French investor Amundi has been confirmed as the buyer of the €1 bn Aqua pan-European office portfolio from Union Investment Real Estate.

The signing of the purchase agreement means that one of the largest office portfolio transactions in Europe this year is nearing completion within five months of the start of a structured sales process.

Amundi is one of Europe’s largest asset managers, with total assets under management of €850 bn, around €11 bn of which is invested in real estate. The purchase agreement is subject to the usual closing conditions, with transfer of the portfolio to Amundi expected in the fourth quarter of 2015.

Union Investment was advised on the transaction by JLL and Clifford Chance. Amundi Real Estate was represented by DTZ, Herbert Smith Frehills, Valteq, Nerco and PwC.

Earlier this year Union Investment hired JLL to manage the sales process to take advantage of the current strong demand for European property. The bidding process was launched in March 2015 and involved nine investors in total. Negotiations took place exclusively between Union Investment and Amundi from June onwards.

Comment
'We quickly found our ideal partner in Amundi. Their strong banking background provides a high level of transaction security and they attach great importance to a structured, thorough sale process while also applying high quality standards,' said Frank Billand, chief investment officer at Union Investment Real Estate.

The Hamburg-based real estate investment manager has a track record with complex portfolio transactions. In 2006 and 2007, Union Investment successfully concluded two portfolio deals for its investors: Nautilus, worth €371 mln, and Pegasus, worth €2.56 bn. 'Those first portfolio deals were intended to make our property portfolio more international. Aqua, our first European portfolio deal, reflects our strategic objective of reducing the age of our existing portfolio,' Billand added.

The assets
The Aqua portfolio comprises 17 office properties with around 278,000 m2 of rental space in six Western European countries, with a 75% focus on the UK (London, Glasgow, Cardiff), France (Paris) and Germany (Ismaning, Ratingen, Frankfurt/Main).

Other locations are Vienna, Helsinki and Rotterdam. The properties generate annual gross rental income of around €60 mln. At the time of sale, 96.6% of the space was let (based on rental income). The portfolio is broadly diversified across 145 office tenants.

Union Investment said the portfolio also features a high level of diversification by bringing together properties worth between €25 mln and €147 mln. The average property value is approximately €50 million, while the average age is slightly above ten years.

Properties from four Union Investment Real Estate open-ended real estate funds were combined in the sales package – UniImmo: Deutschland, UniImmo: Europa, UniImmo: Global and UniInstitutional European Real Estate. The largest contributor is the €10 bn UniImmo: Europa, with seven properties and a 37% share of the portfolio.

The properties sold include the Duetto Business Park, Helsinki, Nord 1 in Frankfurt’s Europaviertel district, Westferry Circus in Canary Wharf in London and the Las Palmas office building in Rotterdam.