Union Investment shops in San Deigo for Europa fund

Hamburg-based Union Investment has announced the acquisition of an office building in the US city of San Diego for its open-ended real estate fund UniImmo: Europa.

KBS Real Estate Investment Trust sold Paseo Del, a three-building property comprising 21,700 m² of rental space, to the German firm for $148mln (EUR 95.6mln).

'This acquisition is an excellent fit with our portfolio strategy for UniImmo: Europa, which is based on boosting our investment outside Europe by targeting fast-growing markets in America and Asia Pacific. The focus of this activity is on office properties,' said Dr. Reinhard Kutscher, chairman of the management board of Union Investment Real Estate.

In a statement, the German company said the modern complex is conveniently located in the Del Mar Heights office market, a submarket in San Diego, California and is 96% let to established long-term tenants. With 1.4 million inhabitants, San Diego is the eight largest city in the US and the second largest in California.

'San Diego's economy is extremely stable and diverse relative to the country as a whole, being built around the telecommunications, electronics, IT, defence, biotechnology and tourism sectors,' Union Investment said. Around 1.5 million people work in the city, which is a major growth area in terms of job creation.

Union Investment said it is significantly expanding its property portfolio in 2008 through acquisitions in Germany and abroad. The company recently acquired Woodland Point in Virginia, USA for its open-ended real estate fund UniImmo: Global for about $100mln. The new office building is let to Volkswagen of America on a long lease.