Top Deals 2012: Union Investment steps up gear

German fund manager Union Investment takes second place in PropertyEU's 2012 Top Investors' ranking with €2.5 bn of acquisitions.

As one of the German open-ended fund managers still ‘open’ for business while several of its peers have been forced to liquidate vehicles, Union Investment appears to have the wind in its sails.

So much so that it acquired a wind farm in Germany during January 2013 for its new infrastructure fund and is targeting other facilities in Scandinavia and Poland. The fund, which was established in May 2012, is seeking total investments of around €1 bn.

On completion of the three-year investment phase, the portfolio should consist of some 20 wind farms and solar parks. A focus on office, retail, hotel, residential and logistics led to the Hamburg-based investor coming second overall in our ranking of top investors, and the top investor in mainland Europe.

The provider of open-ended and special funds (spezialfonds) invested some €2.5 bn over 26 deals in eight European countries during 2012. The largest single transaction was the purchase of Manufaktura shopping centre in Lodz, Poland, for about €400 mln. It also sold 21 smaller assets for €900 mln.

This year, Union acquired three apartment properties in Berlin for a spezialfonds, underscoring the increasing investor interest in the country's residential sector.

According to Savills, German residential portfolio transaction volumes hit €10.45 bn in 2012, the highest level since 2007. Five portfolios of 10,000 units-plus changed hands, although the actual volume for some of these was not disclosed.

The publicised deals, involving the Baubecon and LWWB portfolios and led by German buyers, are among the two largest transactions recorded in Germany last year. Listed companies, followed by German insurers and pension funds, were the most active investors. Savills believes, however, that foreign investors will increasingly get in on the act due to rising levels of interest from private equity funds.

This is an extract from our special report on the top investors of 2012. Click on the PDF below for more on the top German investors.

The March edition of PropertyEU Magazine features an interview with Reinhard Kutscher and Frank Billand, members of Union Investment Real Estate's management board.