Union, Investa launch fund for flexible and 'co-working' office space
Fund manager Union Investment and campus specialist Investa Capital Management (ICM) have launched an alternative investment fund in the form of a Spezialfonds, targeting German office campus properties offering flexible workplace solutions. The Urban Campus Nr. 1 funds marks the first Spezialfonds vehicle in Germany targeting the pioneering and fast-growing 'co-working' segment.
According to Christoph Schumacher, a member of the management board at Union Investment Institutional Property, “This new concept is aimed predominantly at institutional investors looking for strong ongoing income and wanting to broaden their real estate exposure to include this exciting emerging segment. For us, ICM is the perfect partner for this joint fund concept, due to its good access to attractive investment properties”
The Eschborn-based Investa Immobiliengruppe specialises in positioning, implementing and managing campus properties.
The firms said that their targeted assets would include a high-quality urban atmosphere, in lively professionally-managed urban quarters close to scientific facilities and leased to a large number of diverse tenants, particularly SMEs and startups. Ticket sizes will be between €30m and €100m, in A- and B-rated cities with more than 150,000 inhabitants.
According to Rainer Thaler, managing director at Investa, "For the future, what an office building is and what it needs to deliver is being redefined. There is no doubt, however, it includes an environment focused on well-being and a high service density at the location as an integral part. With this innovative fund concept, we are hitting the nerve of the workplace 2.0.”
The Hamburg-based Union Investment’s institutional product range of 'themed' real estate funds currently covers hotels, retail and infrastructure – and now flexible office space. It has €30.4bn in actively managed funds, while its property portfolio consists of 376 assets and projects in 24 countries worldwide. 57% of its property assets are outside Germany, and 15% outside Europe.
Meanwhile, Germany's first and oldest REIT, the Hamburg-based Alstria Office REIT AG, has launched its own co-working concept for flexible office space aimed at the digitally-savvy 'millenial' generation. Known as Beehive, the company is entering the market at the very low-cost end, allowing workers to hire space for as short a period as one day and a rental fee of less than €5.00.
Speaking at a seminar in Frankfurt recently on proptech, Alstria CEO Olivier Elamine waxed evangelically about the new – albeit disruptive - growth segment, while conceding that it might take years for his and other companies to perfect business models emulating the big names in the business such as WeWork, Mindspace, and a host of others working on similar concepts.
Describing his own Beehive model, Elamine said, “For starters, we're setting up a network of small co-working spaces in Alstria buildings, each 400 to 800 sqm in size. We will start with five to seven Beehive spaces per city, with a target of 30 per city by 2020. These will be accessible for free to alstria tenants, and for a cost to third-party users… You pay in Hamburg but your office is Germany.” Alstria has a total of 121 office properties in Germany valued at €3.3bn.