Union Investment has acquired the Holzmarkt 1 development project in Cologne on behalf of its Unilmmo: Deutschland open-ended real estate fund.

Union Investment has acquired the Holzmarkt 1 development project in Cologne on behalf of its Unilmmo: Deutschland open-ended real estate fund.

Financial details were not disclosed.

The asset, comprising 18,700 m2 of rental space, is due for completion in 2015. It consists of two structures, a seven-storey office building with some 17,300 m2 of space and a four-storey residential building comprising 1,400 m2 of space.

'This investment gives us the opportunity to acquire a sustainable, flexible multi-tenant property while at the same time broadening the fund’s footprint across the Rhein-Ruhr region,' said Frank Billand, a member of the management team at Union Investment Real Estate.

Union Investment is acquiring the building from Cascade 1, a joint venture between the Bauwens group and Cologne-based Revisco.

'We are confident that the complex will be fully let before completion in spring 2015,' added Bauwens managing partner Alexander Jacobi.

At the time of purchase, the office part of the multi-tenant building was 72% pre-let. The main tenant with 8,100 m2, is consulting firm Ebner Stolz, while has taken a 10-year lease.

The acquisition is part of the German fund manager's strategy to invest €1 bn in development projects this year. In a recent interview with PropertyEU, Frank Billand, CIO and member of the management board at Union Investment Real Estate in Hamburg, said the acquisition of projects during the early stages of development gives the company a strategic advantage in a very competitive market.

'We invested €2.1 bn across 31 transactions last year, including 11 development deals. In this overheated market, we prefer to buy at the development stage rather than at auctions at the end where pricing can become irrational and where there is a very long queue of interested investors,' he noted.