Union Investment to spend €2.4b during 2013

Union Investment Real Estate intends to invest some €2.4 bn for a range of retail and institutional funds during 2013. The figure is not far of the record investment volume of €2.5 bn that gave the Hamburg-based company second place in PropertyEU's ranking of top European investors in 2012.

This year the bulk of the allocation - €2.35 bn - will be deployed in European real estate markets, Reinhard Kutscher and Frank Billand, members of the management board of Union Investment Real Estate, said during an exclusive interview with PropertyEU.

The 2012 figures and 2013 estimate are considerably higher than the average of €1.7 bn invested by the company annually since 2004. In total, Union Investment Real Estate has invested €16.5 bn in the last 12 years.

Kutscher, chairman of Union Investment Real Estate, said the business plan for 2012 had envisaged spending some €2 bn over the year. 'Once we got started we found out there was sufficient potential in the market - even cherry picking as we always do - to invest more.'

'It is nice to be number 2 in the PropertyEU ranking. Of course the number of deals and overall volume don't count for that much on their own. The result is nevertheless a good signal to the market that we are a reliable partner and once we have signed a letter of intent we will perform.'

Union Investment can deploy so much capital because of the strong inflows into its open-ended funds in recent years. Similarly, Union Investment has seen strong growth in its platform of spezialfonds for institutional investors.

Acquisitions in Europe this year will range from retail, office, logistics and hotels, according to Kutscher and Billand.

Lot sizes will however have to be a bit smaller this year compared to 2012, to safeguard diversification in the finds. In total 26 transactions with a total volume of €2.5 bn were carried out last year. Germany was the most active market in terms of number of deals, while the largest single investment was the acquisition by the open-ended fund, UniImmo Europa, of Manufaktura shopping centre in the Polish city of Lodz for almost €400 mln.

Billand: 'This year we will be going more for lot sizes of €100 mln rather than €400 mln for our open-ended funds.' Aside from its shopping centre vehicle, deals carried out by Union Investment's institutional funds will in general range from €15 to €40 mln a piece.

Union Investment is aiming a further €500 mln outside Europe this year. Most of this is earmarked for office and logistic investment in North America, where the company plans to build on the acquisition by UniImmo Europa of an office tower in San Francisco last June for almost $447 mln (€330 mln).

About €170 mln is going towards Asian real estate.

The full interview appears in the March edition of PropertyEU Magazine, which will be circulated at MIPIM in Cannes.