New residential fund launched by Union Investment and ZBI
The Unilmmo: Wohnen ZBI residential real estate fund launched jointly by Union Investment and ZBI has raised approximately €620 million ($726 million) in its first subscription phase, making it the largest residential-focused open-ended real estate fund in Germany.
As planned, a large portion of the capital raised was invested by the launch date.
More than 50 percent of the initial portfolio secured by ZBI, which has a total value of €460 million ($546 million), has already been transferred to the fund. The transfer of the remaining sub-portfolios is scheduled for August and September.
“With its initial portfolio, the fund is very well positioned to leverage opportunities in the German residential real estate markets,” said Dr. Reinhard Kutscher, chairman of the management board of Union Investment Real Estate GmbH.
A real estate package comprising 260 properties and approximately 2,500 residential units with a total value of some €132 million ($157 million) has already been transferred to the fund. The investment locations are chiefly in the west German cities of Düsseldorf and Gelsenkirchen. To further diversify risk, residential properties in other German federal states, such as Saxony, are also part of the transaction. Some 70 percent of an additional portfolio with a pro-rata value of approximately €113 million ($134 million) has also been transferred to Unilmmo: Wohnen ZBI. The vendor is a U.K.- and U.S.-based group of investors.
The portfolio is mainly located in the federal state of North Rhine-Westphalia, primarily in the cities of Bochum, Essen, Duisburg and Düsseldorf. It comprises 150 properties with around 2,500 residential and commercial units. A program of targeted investment is planned to enable full occupancy and value growth to be achieved.
Unilmmo: Wohnen ZBI focuses on properties that offer affordable living space for the wider population, with medium to high amenity value. Geographically, the fund is open to investment opportunities throughout Germany. With ZBI contributing strong expertise around asset management of residential real estate to its partnership with Union Investment, Unilmmo: Wohnen ZBI will primarily invest in portfolios with recognizable potential for value growth. In addition, mid-market development projects and existing properties requiring refurbishment will also be considered.