Union Investment Real Estate is making sure it keeps some powder dry for future deals, as the ‘wait and see’ mentality continues in European real estate markets.
Michael Bütter, CEO of Union Investment Real Estate, told PropertyEU: ‘Against the backdrop of rising risks in the real estate markets, our investor mandate currently requires us to take a cautious investment course.
‘In the new interest rate environment, new opportunities will arise as market momentum increases again. And we currently see numerous opportunities, particularly in the European core markets, which we will exploit in a targeted manner.’
Andreas Löcher, head of investment management operational and responsible for Union Investment’s €7 bn hotel portfolio which currently comprises some 90 assets, added: ‘We are not too bullish for development projects. However, we are making select deals.
‘In the hotels space, we expanded more recently into pure resort hotels, with two deals in Germany on Lake Tegernsee and on the Baltic Sea. This was a shift away from our traditional model of focusing on city hotels which capture business and leisure travellers.
'I look forward to finding out what the mood is on hotels at Expo. I think we will see a few investors in the market although demand has softened.’
In parallel to this, the company is currently examining selective property sales in Europe and further afield to generate additional liquidity for new purchases, to ‘recalibrate our portfolio and to improve the performance of our funds’, said spokesperson Fabian Hellbusch.
Overall, the firm is optimistic about the usefulness of Expo Real and has brought around 100 team members to the fair, slightly fewer than in previous years.
‘We have a feeling that it’s going to be a great edition of Expo Real, but are anticipating a shift towards asset management themes, extracting value from currently held assets, and eventually, future project developments – preparations for the next real estate cycle,’ Hellbusch added.
