- Investing in large-scale retail property in Germany
- Investors highly interested
- First assets already acquired
- Target volume approximately 500 million euros
26. Juni 2014 – redos real estate is about to launch a new institutional real estate fund that will invest in large-scale retail property in Germany. The new fund, REDOS Einzelhandel Deutschland, will be aimed at institutional investors with a long-term horizon, including pension funds, superannuation schemes, banks, and insurance companies. Within the framework of a collaboration, Union Investment will handle the administration of the fund in the role of a third-party AIFM (“Service-KAG”) whereas rwill take care of the properties in a fund management and asset management role. The two companies will jointly manage the investor accounts. “The new institutional real estate fund has met with tremendous interest among a large number of investors,” explained Bernhard Kraus, Managing Directors of Union Investment Institutional GmbH. He went on to say that half of the funds required, meaning 250 million euros in equity, have already been raised. The target volume for the institutional real estate fund totals approximately 500 million euros.
Investing in Selected Locations
DThis institutional fund invests particularly in large-scale superstores and hypermarkets as well as in retail warehouses. So far, 50 million euros have been spent to acquire four properties for the institutional fund, while the deeds for several properties with an aggregate value of more than 70 million euros are almost signature-ready. “The investments will concentrate on selected sites characterised by high purchasing power and centrality,” elaborated Herrmann. “It should be added that municipal governments rarely ever zone new sites for large-scale retail units of this type in such locations any more. The licensing practice is highly restrictive,” Herrman commented. This makes existing properties particularly interesting for institutional investors with a focus on core properties, because they need not worry too much about competition by new shopping centre or superstore developments in the vicinity. It also implies an attractive yield level for investors.
“Union Investment and redosperfectly complement each other,” elaborated Kraus. “Redos is an experienced asset manager for German retail property, and has many years of experience in the acquisitions as well as in portfolio management and tenant management,” as Kraus added. “Union Investment has a high level of expertise in the institutional fund segment, and access to a superior network of institutional investors,” added Oliver Herrmann, Managing Director of redos. Union Investment manages institutional real estate investments in a volume of currently four billion euros. In 2013, Union Investment raised approximately 1.4 billion euros in institutional funds. “We are delighted to be providing the third-party AIFM platform to redos outside our classic core business,” added Dr. Christoph Schuhmacher, Managing Director of Union Investment Institutional Property GmbH, the company that will administer the institutional fund for redos.
About Union Investment
Union Investment manages institutional real estate investments in a volume of currently four billion euros. In addition to widely diversified real estate investments and theme funds, Union Investment also offers target-group-oriented concepts to institutional investors. Within the framework of so-called service mandates, Union Investment may take care of the administrative fund services, for instance, and thus ensures the compliance with regulatory requirements. In this context, Union Investment collaborates with third-party asset managers. For more details, please go to www.union-investment.de