Union completes sale of main tranche of €1b Aqua portfolio

Union Investment Real Estate said on Monday that it has completed the sale of the main tranche of the €1 bn Aqua pan-European office portfolio to French investor Amundi.

Hamburg-based Union first announced in August this year that it had signed a preliminary agreement to sell the 278,000 m2 portfolio, which consists of a total of 17 office properties in six Western European countries, with a 75% focus on the UK (London, Glasgow, Cardiff), France (Paris) and Germany (Ismaning, Ratingen, Frankfurt/Main).

As part of the first tranche, Amundi has taken control of 11 office properties with total rental space of 190,000 m2. The properties are located in Germany, France, the UK and the Netherlands.

'With Aqua, we have implemented our regular sales programme of €1 bn per year in record time and highly efficiently,' said Frank Billand, Chief Investment Officer and a member of the management team at Union Investment Real Estate. 'The portfolio premium is a positive side effect and reflects our good timing. The sale was primarily aimed at reducing the age of our existing holdings and removing future threats to income from the fund portfolios.'

'The clear, solid positioning of the Aqua portfolio – offices, Europe, high-quality buildings – helped to ensure the sale was completed quickly and profitably,' commented Union's head of investment management Europe Philip La Pierre. 'The homogeneity of the portfolio is now of key importance for investors.'

Union Investment said it intends to reinvest the sale proceeds in high-return properties and projects, chiefly in Europe, the US, Mexico, Japan and Australia.

The Aqua portfolio generates 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 mln, while the average age is slightly above 10 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 already sold include:

Germany
Nord 1, Frankfurt/Main (UniImmo: Deutschland)
Schwedler Carré, Frankfurt/Main (UniInstitutional European Real Estate)
Airport-Center, Hamburg (UniImmo: Europa)
Adalperostraße, Munich-Ismaning (UniImmo: Europa)
Goldbach Office Park, Düsseldorf (UniImmo: Europa)

France
Atrium Boulogne, Paris (UniInstitutional European Real Estate)
Le Prime, Boulogne-Billancourt (UniImmo: Global)
Marco Polo, Paris (UniImmo: Global)

UK
Admiral, Cardiff (UniImmo: Europa)
Equinox, Glasgow (UniImmo: Deutschland)

Netherlands
Las Palmas, Rotterdam (UniInstitutional European Real Estate)