Union Investment has taken important steps on many levels to align its real estate business with a myriad of transformation requirements. The target vision is of a strong real estate platform that serves a range of property asset classes and different customer needs. By Fabian Hellbusch and Lena Teuber (graphics)
Institutional real estate business
The offering for institutional customers will be actively expanded by adding tailored real estate solutions.
Strong statement: Union Investment realised its first individual mandate in 2021 with pension fund Bayerische Versorgungskammer (BVK). By way of a new investment management company set up and managed by Union Investment, BVK has taken a 50 percent stake in an office development project in Munich which is already let on a long-term lease to the German Patent and Trade Mark Office. New customised solutions are in the pipeline.
Investment management
New property types and investment styles open up additional acquisition opportunities and boost the resilience of the portfolio.
Setting the course: Union Investment successfully tapped into the residential asset class outside the DACH region for its open-ended real estate funds last year. Overall, projects worth a total of around a billion euros were acquired in the residential segment in Amsterdam, Dublin, Helsinki and the US. Further growth is planned.
Asset management
Active value creation at the acquisition stage and the transformation of existing properties are set to become key drivers of performance.
New directions: The company’s new manage-to-core strategy, which aims to create value by repositioning existing buildings, opens up new acquisition opportunities for Union Investment, especially in its home market. Like MediaWorks Munich, for example. This joint venture project was Union Investment’s largest transaction last year, involving planned investment of around €1.2 billion.
HR
Innovative corporate culture: active HR management, diversity and new forms of collaboration provide the basis for future success.
A fresh perspective: The first Next Generation Board was constituted in Union Investment’s Real Estate segment at the start of the year. Made up of young professionals, it will serve as an advisory body to management. Young voices at Union Investment have thus been given an innovative and important platform.
Processes and ongoing development of the business model
Digitisation and a new data strategy create the framework for streamlined, efficient processes and successful evolution of the business model.
Implemented in practice. Through Docusign, for example. Digitising the contract process provides efficiency benefits at many stages. Eighty percent of the documents circulating in the company that require a signature are signed, processed and administered electronically – from shareholder resolutions to tax returns. This speeds up contract completion and eliminates time-consuming manual tasks.
ESG and social responsibility
Meeting climate goals responsibly: upgrading of existing buildings is managed sustainably through our Manage to Green strategy.
Sustainability on track: Union Investment’s Immosustain software solution is designed to serve as a central platform for consumption data and sustainability management of properties. The objective of achieving zero carbon with regard to existing buildings is thus being actively and effectively supported. Over the next few years, all fund properties will be equipped with an energy monitoring system. Electricity, heating and water consumption will then be tracked in Immosustain.
By Fabian Hellbusch
