France's Amundi the buyer of Union's €1bn Aqua portfolio

French investor Amundi Immobilie is the buyer of Union Investment Real Estate's €1bn "Aqua" pan-European office portfolio, in what is shaping up to be one of the largest portfolio transactions of the year.

The deal is likely to be completed within five months of the start of the structured sales process, with up to nine investors involved since the bidding process was launched back in March. Property advisors JLL managed the bidding, but it was known that Amundi had been in exclusive negotiations with Union Investment since June.

Amundi is one of Europe’s largest asset managers, with total assets under management of €850bn, around €11bn of which is invested in real estate. The purchase agreement is subject to the usual closing conditions, with transfer of the portfolio to Amundi expected in the fourth quarter of 2015.

With the Aqua portfolio, the French investor is buying 17 office properties in Austria, the UK, France, the Netherlands, Finland and Germany, with a 75% focus on the UK (London, Glasgow, Cardiff), France (Paris) and Germany (Ismaning, Ratingen, Frankfurt/Main). Other locations are Vienna, Helsinki and Rotterdam.

The properties generate annual gross rental income of around €60m. At the time of sale, 96.6% of the space was let (based on rental income). The portfolio is broadly diversified across 145 office tenants.

Union Investment said the portfolio also features a high level of diversification by bringing together properties worth between €25m and €147m. The average property value is about €50m, while the average age is slightly above ten years.

Properties from four Union open-ended real estate funds – UniImmo Europa, UniImmo Deutschland, UniImmo Global and UniInstitutional European Real Estate – make up the 278,000-sqm portfolio. Seven of the properties came from the UniImmo: Europa fund and account for a 37% share of the portfolio.

Dr. Frank Billand, chief investment office at the Hamburg-based Union Investment, commented: “We quickly found our ideal partner in Amundi. Their strong banking background provides a high level of transaction security and they attach great importance to a structured, thorough sale process while also applying high quality standards.”

Giving a rationale for the deal, Dr. Billand referred to Union Investment's track record with complex portfolio transactions. In 2006 and 2007, Union Investment concluded two portfolio deals for its investors: Nautilus, worth €371m, and Pegasus, worth €2.56 bn. "Those first portfolio deals were intended to make our property portfolio more international. Aqua, our first European portfolio deal, reflects our strategic objective of reducing the age of our existing portfolio," Billand said.