Union Investment to buy German logistics portfolio for €120m

Union Investment has agreed to purchase a logistics property portfolio from Trans Service Team (TST), a German logistics service provider, for €120 million ($132 million).

The acquisition will be made on behalf of the open-ended real estate fund Unilmmo: Europa, which purchases real estate primarily from the European Economic Area or interests in real estate companies. Unilmmo: Europa currently comprises €12.7 billion ($14 billion) in real estate assets, and up until now held only one logistics property, in Heddesheim near Mannheim.

The portfolio, which has a total lettable area of 120,000 square meters (1.3 million square feet),  consists of one existing property and three development projects in the Ruhr and Rheinhessen regions of Germany. TST, together with the Worms, Germany-based TIMBRA Group, will handle the development, planning and sale of the portfolio.

The existing property, constructed in 2016 on Gneisenauallee in north Dortmund, Germany, comprises 24,000 square meters (258,333 square feet) of rental space. An additional 17,000-square-meter (182,986-square-foot) logistics property is scheduled to be completed nearby.

TST is developing another property which is also part of the portfolio, on Siemensstraße in Bönen, adjacent to the A2 motorway, 25 kilometers (15.5 miles) east of the Dortmund site.

“The Ruhr region is one of the most sought-after logistics areas worldwide,” said Stephan Riechers, head of investment management logistics. “The outstanding infrastructure and high population density mean that conditions are highly favorable for logistics services. We already hold investments in the Rheinhessen region through other real estate funds. The TST development project provides us with a good opportunity to increase our exposure in the area.”

TST’s development project in the Rheinhessen region, the largest of 13 German wine regions, is planned for Worms, Germany. The property on Mittelrheinstraße in Worms will have approximately 49,000 square meters (527,431 square feet) of rental space and is scheduled for completion by spring 2020. All new developments are expected to receive DGNB (German Sustainable Building Council) certification in Gold. The existing property in Dortmund already has a DGNB Gold certificate.

The acquisitions will bring Union Investment’s logistics portfolio to 22 properties and projects, valued at €1 billion. The investment manager said it intends to further boost its exposure to logistics properties in the European core markets and double its logistics investment volume within three years.