Reinhard Kutscher is Chairman of the Management Board at Union Investment Real Estate GmbH.
Adele Marschner / Union Investment

The power to change

Reinhard Kutscher, Chairman of the Management Board at Union Investment Real Estate GmbH, Hamburg

To the point – this again is the rubric at the top of the latest issue of our real estate magazine “places & spaces”. For once, we would like to use this piece to talk about ourselves – and with good reason: this year marks the 50th anniversary of the establishment of the present Union Investment Real Estate GmbH. On 17 December 1965, the members of the then cooperative societies launched what would be the second asset management company of its kind in Germany specialising in real estate. At that time, the company operated under the name of co op Immobilienfonds Verwaltungs AG.

A few months later, on 1 July 1966, the open-ended real estate fund co op Immobilienfonds came into being. As a milestone in the history of Union Investment and evidence of half a century of real estate expertise, that fund still exists today, as UniImmo: Deutschland, and is one of the biggest of its kind in Germany with fund assets in excess of €10 billion. It was joined years ago by a further two funds for private customers, UniImmo: Europa and UniImmo: Global. For more than ten years, the open-ended retail real estate fund model has also been used as a vehicle for institutional investors, initially through UniInstitutional European Real Estate, which was followed in 2012 by UniInstitutional German Real Estate. With fund assets of almost €25 billion in its open-ended retail real estate funds alone, Union Investment is the biggest provider of this product group in Germany. As we are all aware, there is nothing more permanent than change. To put it another way, permanence requires the ability and the power to change.

The fact that Union Investment possesses both these qualities is demonstrated by the successes of the past 50 years and by the upheavals and crises during that period and our achievements in overcoming them. Thus, the principle of continual improvement has kept our company on a steady course in times of external shocks and crises – such as the net outflows of funds during the oil crisis of 1973/74, the German commercial real estate market crisis of 2004/05, the financial market meltdown in 2008 or the nuclear disaster in Japan in 2011. It also proved its worth when the investment universe expanded substantially as a result of changes in the legal framework governing real estate asset management companies. Now, investing was permitted across national borders, and even in different continents. Starting in the first decade of this century, Union Investment entered 19 new national markets, and investments are now distributed among 23 countries. In 2014, we made the leap into a new continent: Australia. The purchase of the Southpoint office project in Brisbane marks the beginning of a new chapter in our investment story – and another milestone. We are certain that more will follow and that we have set a firm course for the future.

At the same time, we are aware of the challenges involved: the low-interest-rate environment and the shortage of alternative investments are flooding global property markets with capital. This is forcing prices up and pushing yields down – all this despite economic and geopolitical uncertainties. Moving safely in this environment requires efficient organisational structures, professional risk-control instruments and clear investment strategies. We have done our homework in all of these areas. Standardised investment and risk-control processes using modern data-management systems enable our fund and asset managers to identify both opportunities and threats quickly and to take swift decisions. That gives us a substantial competitive advantage at a time of ever shorter market cycles. Finally, broad diversification of our investment strategy contributes towards safeguarding property portfolios against both cyclical fluctuations and unforeseen risks. These and other topics feature in the latest issue of “places & spaces”. As usual, the magazine focuses on the present and future of the real estate industry – an industry Union Investment has always been a part of. We are convinced that achieving change successfully requires enduring partnerships. Let us lay down more milestones together in the future!


More about these topics: