What is the scope of the rental business
Union Investment is strengthening its portfolio with over one million square meters of rented property in 2019
January 22, 2020
• New and subsequent leases of 1.1 million m2 in 21 countries
• Germany accounts for around 66 percent of the rental services
• 14 percent of the existing space was newly or re-let
In 2019, Union Investment has commercial real estate with a total volume of 1.1 million m2 new and re-let. This corresponds to an increase of around 30 percent compared to the previous year and around 14 percent of the space currently under management. At around 66 percent, the majority of the rental services related to real estate in Germany. Other European locations accounted for 24 percent, while non-European properties accounted for around 10 percent of the total letting performance. From a fund perspective, the new and subsequent leases represent an annual net rent of around 263 million euros. The total letting rate based on income based on all actively managed real estate funds is 96.8 percent.
“A leasing performance of around 1.1 million square meters in relation to the approximately 7.7 million square meters of commercial real estate that we hold in our portfolio is the result of excellent teamwork. Lease extensions and follow-up leases are often just as laborious to achieve as new leases - and we have generally succeeded in additionally increasing the profitability of the properties through successful leases. We have once again fulfilled the mandate of our investors in a remarkable way. "
Volker Noack, member of the management of Union Investment Real Estate GmbH
The rate of new lettings in the overall 2019 balance is around 22 percent. This corresponds to a commercial real estate area of 243,000 m2.
New leases in the German office portfolio
Due to the enormously high occupancy rate in the German office property portfolio, the number of new leases here was rather minor. 4,100 m2 in the "H19" in Düsseldorf are already the largest single lettings. The new letting activities in the Munich area should also be mentioned. The three office properties "Maximilian 35", "Park.Gate" and the "IT-Port" in Unterschleißheim are between 2,200 and 2,800 m each2 united in itself. If you look at the DACH region, you also count around 4,000 m2 in “Euro Plaza” 4 in Vienna among the top new lettings.
Focus on the international office markets
New letting activities were also exceptionally high in France. Around 43,000 m2 of new rentals correspond to a rate of almost 74 percent. The strongest drivers for this were the two project developments “Grand Central Paris Saint-Lazare” and “EKLA Business” in Lille, which have now been completed, and which together cover around 31,000 m2 contributed to new rentals. The largest new leases in the non-European markets relate to the “111 South Wacker” office property in Chicago with around 4,900 m2 and "Shibuya Prime Plaza" with around 2,900 m2 in Tokyo. Mention should also be made of a rental service for the property “555 Mission Street” in San Francisco over around 30,000 m2. Among other things, the two existing tenants Deloitte and DLA Piper were successfully retained there.
New rentals in the retail portfolio
The new leases in Union Investment's retail properties in 2019 are usually associated with major measures as part of active portfolio management. This applies in particular to the “Riem Arcaden” in Munich with a new letting capacity of 8,800 m2 after the latest expansion, the “Wandsbek Quarrée” in Hamburg with new leases of around 8,000 m2 and the "Rhein-Galerie" in Ludwighafen, around 3,200 m2 were re-let. Also noteworthy are the 4,500 m2 in the "Rheinpark-Center" in Neuss near Düsseldorf. From the international retail stock, in the context of ongoing development of the center, the “Manufaktura” in Lodz, Poland, with around 4,100 m2 New letting performance and the “K” in Kortrijk, Belgium, with around 2,000 m2 to lead.
Logistics and hotel with strong contributions
Logistics and hotel properties also made an exceptionally high contribution to the rental balance in 2019. Union Investment has a total of around 248,000 m in six logistics properties from its German portfolio2 new and re-let. In the hotel area it is 83,000 m2, mainly driven by the successful rental extension of 30 years for the "InterContinental Berlin".
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