Union Investment is part of a growing group of investors which are moving into mid-tier cities in Germany as the hunt for higher yields continues.
Union Investment is part of a growing group of investors which are moving into mid-tier cities in Germany as the hunt for higher yields continues.
In September, the Hamburg-based fund manager acquired the Kröpcke Shopping Centre in Hanover for its open-ended real estate fund UniImmo: Deutschland. The vendor was Düsseldorf-based developer Centrum Group which had refurbished the centre prior to the sale.
While the parties agreed not to disclose the purchase price, market watchers value the deal at around €180 mln. 'It fits the picture, that this was the largest single deal in the third quarter, exceeding in volume every other non-portfolio transaction including those in the big city markets,' said Helge Scheunemann, head of research at Jones Lang LaSalle.
For Union Investment the Kröpcke deal is part of a broader strategy. 'With our first investment in Hanover we have taken a further step to diversify the portfolio of the fund across mid-sized German cities,' said Philip La Pierre, head of investment management Europe at Union Investment Real Estate.
In 2012, the Hamburg-based fund provider acquired the Sophienhof shopping centre in Kiel for its UniImmo: Deutschland fund. Now Union Investment is planning a spending spree in secondary locations with a new €350 mln fund set up for institutional clients. 'The UniInstitutional German Real Estate Fund will focus primarily on commercial property in mid-sized German cities,' said Fabian Hellbusch, head of marketing at Union Investment Real Estate.
