German property fund manager Union Investment Real Estate has today announced the sale of €2.56bn (£1.75bn) of German properties as part of the realignment of its two main funds.
Union, the new name for DIFA, has sold the 54 assets focused on the Rhine-Main and Berlin regions to Morgan Stanley Real Estate Funds (MSREF) and IVG in separate transactions.
MSREF is buying 28 properties, including the Neues Kranzler Eck development in Berlin, from the UniImmo:Deutschland fund (formerly DIFA-Fonds Nr. 1) for €1.36bn (£930m). MSREF is also buying the Frankfurter Welle for €703m (£481m).
IVG is buying 25 properties, primarily held by the UniImmo:Europa fund (formerly DIFA-GRUND), for E495m (£339m).
Atisreal and Latham & Watkins advised Union on the transactions. Morgan Stanley advised MSREF.
This sale reduces the proportion of German properties in the UniImmo:Deutschland fund from 71% to 57.5% and from 40% to 35% for UniImmo: Europa.
‘In a single move this sale creates a balanced, well-diversified portfolio structure within the funds, comprising an appropriate mix of solid high-yield German and Western European properties,’ said Frank Billand, a member of Union’s management board.
Union now owns 81 properties in Germany valued at E4.8bn (£3.28bn). ‘Germany remains our most important investment location,’ said Billand. ‘We are looking for further investment opportunities here and currently see potential for our funds in Hamburg and Munich in particular.’
Last October Union sold two portfolios comprising 14 German office properties to Tishman Speyer Properties and IVG for a combined €860.5m (£588m).