Union Investment commits further to resi with 49.9% stake in ZBI
German cooperative fund manager Union Investment has made its latest move into the German residential sector by entering a partnership with family-owned housing specialist ZBI Zentral Boden Immobilien.
Specifically, Union Asset Management Holding is taking a 49.9% stake in ZBI Partnerschafts-Holding, which will target self-contained residential units, for an undisclosed amount. Union said that it planned to increase its stake in the partnership over the coming years.
Union Investment said it is now committed to adding residential real estate to its existing range of open-ended real estate funds.
According to Hans Joachim Reinke, CEO of Union Investment, “Demand from retail and institutional clients for residential real estate funds is high, hence we have decided to build up our specialist knowledge of residential real estate and to start doing business in this area. The expertise of the ZBI Group and that of Union Investment complement each other perfectly, and we share the same values.”
ZBI Group's founder and supervisory board chairman Peter Groner commented, "We have covered the entire residential real estate value chain for many years. With more than ten branches throughout Germany, we are able to make attractive investments beyond the country's major cities." ZBI has about 270 staff. Union Investment has more than €34bn of real estate assets under management.
Union's move follows the awarding of a mandate late last year to Deutsche Asset One to invest in German residential property on its behalf. Deutsche Asset One, part of Berlin-based Dupuis Investment & Asset Management, is setting up an open-ended fund for Union with an initial €170m to invest.
Union said at the time that the specialist investment fund was formed through a pure equity club deal with German institutional investors. Investment will be split across A-cities, B-cities in metropolitan regions and selected C-cities with particularly above-average spending power and anticipated population growth.
Thilo von Stechow, managing partner at Deutsche Asset One, said the vehicle already had investments worth "hundreds of millions of euros" in the due diligence pipeline. Despite the rise in real estate prices across the board, he said, the residential investment market still offers long-term opportunities, with the sector meriting a “permanent presence in the real estate portfolio of any German institutional investor”.