Union Asset Management Holding AG
Dr. Billand - Union Investment
'Reducing the average age of our portfolio is an active precaution against risk in our funds, and we constantly strive to improve the age profile of our properties,' said Frank Billand, a member of the management team at Union Investment Real Estate.
German developer Aurelis Real Estate, controlled by private equity group Grove International, has bought four German business parks from fund manager Union Investment, for an undisclosed price.
The properties are located in Düsseldorf, Cologne, Liederbach (Frankfurt/Main) and Wiesbaden. Together they comprise 104,000 sqm of space developed between 1988 and 2001. The assets were held in the portfolios of open-ended real estate funds Unilmmo: Deutschland and UniImmo: Europa.
This sale is in line with Union Investment's ongoing strategy of reducing the average age of its portfolio. In 2014, the Hamburg-based real estate investor sold older properties worth a total of €1bn while at the same time buying more recent properties for €2.4bn.
The sale is the second transaction between Union and Aurelis. In April, Aurelis bought a business park in Kirchheim near Munich from the fund manager, comprising 28,700 sqm of rental space. The portfolio generates rents of €9.4 mln a year and includes properties for office, warehouse and service uses. There are currently 90 tenants across the four locations, representing a letting ratio of around 80%.
'Reducing the average age of our portfolio is an active precaution against risk in our funds, and we constantly strive to improve the age profile of our properties,' said Frank Billand, a member of the management team at Union Investment Real Estate.
The Eschborn-based Aurelis is reported to be preparing for a stock market flotation after the summer. The group recently posted full-year 2014 figures, showing it tripled net income last year to €74m. It also took advantage of the favourable interest rate and financing climate to pre-empt a refinancing of debt obligations due in December 2016, by securing a new syndicated loan of €530 with pbb Deutsche Pfandbriefbank and an additional unnamed lender, of which €430m came from pbb Deutsche Pfandbriefbank.
The group, formerly part of Deutsche Bahn and holding large urban landbanks as part of its railway legacy, earned €371 from the sale of new developments in 2014, while generating rental income of €60m through its portfolio of commercial properties, which amounted to a combined 11m sqm across Germany’s larges cities. Acquisitions included business parks in Böblingen and Ratingen, a mixed-use commercial property in Hanover, and warehouse and office space in Hilden.
If the IPO goes ahead it should be worth about €500m, valuing the group at over €1bn and providing a part-exit for Grove, which last year bought out the 50% stake in the company owned by construction group Hochtief. The two had paid €1.6bn in 2007 for Aurelis from legacy owner Deutsche Bahn, but have since shrunk the company’s portfolio significantly.
