Three German equity players paid around €850 mln in April to acquire some of the most sought-after properties for institutional investors: big-ticket, core assets with a secure, long-term cash flow and low risk profile located in major European cities.

Three German equity players paid around €850 mln in April to acquire some of the most sought-after properties for institutional investors: big-ticket, core assets with a secure, long-term cash flow and low risk profile located in major European cities.

For Deutsche Asset & Wealth Management (DeAWM), this translated into the acquisition by two of its funds of Rondo 1, the largest office tower in central Warsaw. Poland’s economic story is a powerful draw for a wide range of real estate investors. But even with a recovery in the debt markets few could compete with DeAWM, part of the Deutsche Bank group, which was able to pay €300 mln in cash for the 40-storey Warsaw landmark.

German insurance giant Allianz put an equal amount on the table but stayed closer to home during our review period in April 2014. The firm's real estate arm took ownership of the Kö-Galerie shopping centre on the Königsallee shopping mile in Düsseldorf, giving it access to the rental income from 90 retail units as well as 30,000 m2 of office accommodation above the mall.

Union Investment Real Estate – backed by DZ Group’s 900 co-operative bank members - completed the German trifecta in April. The Hamburg-based investor consolidated its dominant position in Amsterdam’s Zuidas – the premier business district in the Netherlands – by paying around €244 mln for the two-building IT/SOM complex, which market watchers say equates to a gross initial yield of 6.7%.

The assets, offering a total 52,000 m2 of office and retail space, will be added to Union’s open-ended UniImmo: Europa fund. ‘With a relatively low vacancy rate of 6.8%, Amsterdam’s Zuidas district is one of the Netherlands’ most attractive office markets. Demand for office space in this core location is rising significantly,’ commented Philip La Pierre, head of investment management Europe at Union Investment Real Estate.

Underscoring its confidence in the Zuidas, Union Investment has also purchased two office developments in the area in just over a year. In January it acquired the new headquarters of law firm Stibbe for €54 mln from developer Dura Vermeer. And in March 2013, the fund manager acquired a neighbouring project, also being developed by Dura Vermeer, for Dutch coatings specialist AkzoNobel.

According to PropertyEU Research data, Union Investment acquired AkzoNobel's new 15,216 m2 headquarters for €82 mln, reflecting a yield of 6.2% for its Unilmmo: Deutschland fund. The project is due to be delivered in 2015. Besides office assets, Union Investment also owns the Motel One development as well as the UN Studio (25,000 m²) and 207-room Crowne Plaza hotel in the Zuidas district.