Heading up management of the UniImmo: Deutschland fund is a genuine mission for real estate expert Thomas Röhrs. The experienced fund manager and business studies graduate has been responsible for developing this classic fund since 2008. Launched in 1966 as one of the first open-ended real estate funds in Germany and now the biggest fund in the UniImmo family, it’s aimed at investors with a conservative investment strategy who want to benefit from real estate in major German and European cities while keeping risks low.
Röhrs, who has been “the face” of the fund for twelve years now, has played a crucial role in UniImmo: Deutschland’s impressive growth and ongoing development. During his tenure, the fund has grown in size from €5.5 billion to over €13.4 billion. Röhrs has internalised the fund’s positioning: “I’m in the fortunate situation of being able to follow my own convictions on real estate investment in UniImmo: Deutschland, supported by excellent processes and systems.” The fund’s helmsman has a complex and multi-layered role. With 78 properties held at present, Röhrs is continuously making strategic and tactical adjustments to ensure the portfolio’s long-term viability. This enables him to deliver on the product promise for the approximately 570,000 investors and also maintain the trust of distribution partners and of the customer advisers across the Volksbanken Raiffeisenbanken cooperative banking network who sell the fund. Each Union Investment open-ended real estate fund is managed by a dedicated team that operates independently. The fund management team deals with all issues relating to the fund and makes the necessary decisions. As such, Röhrs and his colleagues are the gatekeepers of UniImmo: Deutschland. He sees himself as the guardian of product quality and sets a high yet simple standard: “Because the team is responsible for performance, it has to have conviction.”
Thomas Röhrs (56) started his propertysector career in 1995 at investment management company Westinvest. The holder of a degree in business studies, he worked as a sales director, head of sales and fund manager before moving to Union Investment Real Estate GmbH, Hamburg, in 2008 as head of fund management for Uni-Immo: Deutschland.
Management involvement along the entire value chain
Eight years ago, the existing policy of giving fund management units more power and full responsibility for performance was further reinforced, with the lead role of fund management being embedded in workflows and decision-making processes. “As a central unit, we work with all departments across the organisation,” explains Röhrs. Röhrs’ involvement extends throughout the entire real estate value chain, starting with the acquisition phase. “Every two weeks, we get together with our investment colleagues as a panel,” reports Röhrs. New real estate investment opportunities are presented to all fund managers at the same time in this forum as candidates for acquisition. If an investment is of interest and compatible with multiple fund profiles, the property goes through a sophisticated and objective fund allocation process to decide which fund should take the matter further. “The relevant fund management team then works on the acquisition in close consultation with colleagues on the investment side,” explains Röhrs.
UniImmo: Deutschland’s most recent investment is the Ericus-Contor building in Hamburg. “It’s an office property that combines exceptional construction quality with an excellent location,” says Röhrs. The deal reflects the fund’s diversification strategy: “As a high-quality investment in an attractive long-term location between the city centre and the vibrant HafenCity district, Ericus-Contor boosts the Hamburg exposure of our portfolio.
Röhrs highlights the other benefits: “The property is architecturally exciting and enjoys high occupancy, thereby providing a reliable income stream. It’s an excellent fit with our requirements and fund profile.” What’s more, Ericus-Contor is let to multiple tenants, “which offers additional diversification in the form of companies from the shipping industry.” The acquisition marks the fruition of a plan to enter the Hamburg office property market again in 2020. Martin Schellein, Head of Investment Management Europe at Union Investment, naturally has a strong understanding of the fund’s strategy. He initiated the purchase, along with his investment team, and got it across the line in conjunction with the fund manager.
Persuading and explaining are integral to fund management
Röhrs firmly believes that sustainable buildings are critical when it comes to future viability of a portfolio. Fittingly, Ericus-Contor has DGNB Platinum certification, the highest level awarded under the German scheme. “But a sustainability label on its own isn’t the deciding factor,” explains the fund manager. “Our long-term aspiration is to digitally measure the energy performance of a building, in order to understand it and make improvements. Long-term tenant retention calls for buildings that are sustainable and have good energy credential,” says Röhrs. “It’s important that our decisions are well founded and coherent, as they need to stand up to scrutiny both internally and by customers. Everyone involved in the success of UniImmo: Deutschland needs to be aware of the constraints and priorities,” stresses Röhrs, talking about his tried-and-tested formula. “Over the years, this creates a degree of predictability that allows us all to work more effectively.” For handling acquisitions and ongoing management of the properties held by UniImmo: Deutschland, Röhrs has structured his team by national markets and property type. His portfolio managers also take on other special tasks, in particular expert management of all parameters affecting the fund. This includes scenario analysis as well as developing strategic options in consultation with other relevant departments.
Liquidity management is a particularly important responsibility. Inflows from the issuing of new units are carefully planned and managed in conjunction with the Frankfurt-based product management team. “UniImmo: Deutschland is still being marketed at present,” reports the fund manager. The aim is to invest new monies swiftly through corresponding acquisition planning.
“In a low-interest environment we have to keep a critical eye on returns from uncommitted funds,” says Röhrs, adding that this helps to ensure fund performance is driven by investing in real estate. Another challenge is the current impact of the Covid-19 crisis on the fund. For the Uni-Immo: Deutschland portfolio with its focus on offices, retail/restaurants and hotels, risk management entails considering a range of scenarios and strategies. “We’re engaging with tenants who are particularly affected by the crisis to find a way forward that makes sense for both parties.” Working in partnership and granting temporary concessions are central to the fund manager’s approach here, because post-crisis “competition for good tenants will hot up again.”
As an indirect and broadly diversified real estate investment vehicle, open-ended real estate funds like UniImmo: Deutschland have, in Röhrs’ view, repeatedly shown that they are “an indispensable allocation option for investors that provides greater stability.” “We demonstrate that every single day,” says the fund manager, “and always seek to protect and nurture our greatest asset – the trust of investors.” Röhrs has a confident take on the future: “We have a strict focus on quality and a strong basic conviction in our product going forward, we’re pulling out all the stops to emerge safely from the current crisis.”
By Elke Hildebrandt (Text) and Sebastian Vollmert (Photos)