Global Real Estate Expertise.pdf - CAP SQUARE TOWER

Global real estate expertise

Editorial
Cover: Properties from the Union Investment portfolio (from left to right: Torre Diagonal Litoral B-3, Barcelona; Torre Diagonal Mar, Barcelona; Zebra Tower, Warsaw; Torre Mayor, Mexico City; One Coleman Street, London; Emporio, Hamburg; Rembrandt
Tower, Amsterdam; Torre Paris, Santiago de Chile; Las Palmas, Rotterdam)

Dear business partners
and friends of the company,
Union Investment has always regarded reliability
and partnership as essential for success.
In a turbulent market environment,
these values help us to exercise corporate
respon sibility in all our activities.
Our long-term approach makes us a valued
partner for anyone who regards real estate
as a key investment option. The decision not
to allow major investors to invest in our
retail funds reflects our philosophy of generating
sustainable growth through forwardlooking
action.
With a talented team of some 350 property
experts at our Hamburg site, we are well
placed to achieve continued growth even in
tough market conditions. Execution of our
strategy involves working with strong partners
both inside and outside Germany who
share our desire to tap into new business
opportunities.
Operating in 25 national markets worldwide,
we are constantly reviewing and developing
new solutions with the aim of future-proofing
our excellent, high-quality portfolio. This
brochure includes specific examples of how
we achieve this in practice.
We were quick to recognise the need to
incorporate sustainability criteria when developing
our property holdings. The rising
number of certified buildings in our portfolio
is just one indication of the importance we
attach to environmental and sociocultural aspects
in our investment policy, alongside longterm
commercial viability. We aim to identify
and leverage the opportunities arising in
this area, together with our tenants, other
investors and additional players in the property
market.
We look forward to teaming with you to
develop exciting new perspectives.
Dr. Reinhard Kutscher
Managing Director of Union Investment Real Estate GmbH and
Head of Real Estate, Union Investment Group
3

Profile
4

Contents
A solid foundation yon can trust 6
Benefit from shared experience 8
Quality you can count on 10
Clarity of purpose, clarity of structure 12
5

Union Investment Real Estate GmbH and
Union Investment Institutional Property GmbH
are the real estate specialists within the
Union Investment Group, who also bridge
the gap between markets. With our asset
management expertise, we provide tailored
indirect property investment products which
are available to both private and institutional
investors. At the same time, we are active
within the commercial real estate sector as
an investor, property seller, project/property
developer and landlord, as well as providing
services across all areas of the market. Financial
strength, experience and a customer-
centric approach are features of all these roles.
Our success is founded on a long-term investment
strategy geared towards stable

eturns that also allows us to benefit from
value-appreciation opportunities in regions
with higher risk. Investments in downtown
office space, shopping centres and business
hotels in the world’s major business centres
are key elements of our investment policy.
This careful combination of property sizes,
uses and regions delivers the strong asset
base that sustains our funds.
Decades of experience combined with the
capital market competence of a strong group
make us a reliable partner for sustainable
property investment worldwide – a foundation
you can trust.
A solid foundation you can trust
The figures speak for themselves: more than 45 years of real estate experience
and a highly diversified portfolio of over 300 properties in 26
countries. Around 640,000 investors who rely on our fund management
expertise, with assets under management totalling some EUR 19 billion
in seven open-ended real estate funds. In other words, our business is
built on a solid foundation.
7

Back in 2002, we were active in 6 national
markets. Now it is 25. But we only invest in
markets where we understand the full investment
potential – from initial decision to
exit – and see the opportunity to manage
small to mid-sized portfolios or more extensive
holdings. For us, “think global, act local”
is more than just a slogan. Having our own
teams and a growing network of strategic
partners means we can operate at local level,
close to the market.
We take a long-term view, as dictated by prudent
principles. All investment decisions are
based on strategy-driven real estate research.
This analysis helps us to identify emerging
opportunities and assess risk appropriately,
while the resulting investment strategies are

supported by a clearly defined process. Active
management of liquidity, foreign currency
exposure and property holding companies
enables us to handle complex property transactions
successfully worldwide.
But it is not just processes that are crucial,
getting the timing right is also vitally import-
ant. This, together with a passion for real estate
and the commitment of our employees,
has made us what we are today: one of
Europe’s leading property investment management
companies.
We are happy to share our experience.
Benefit from shared experience
Experience is the key to success. As such, our outstanding property portfolio
is the tangible result of many years’ experience across the entire
value chain of real estate asset management. Thanks to this core strength
and a network of international partners, plus the research resources and
capital market competence of a strong group, we are exceptionally well
equipped to face new challenges today and in the future.
9

From the landmark Torre Mayor tower in Mexico
City to 111 South Wacker Drive in Chicago
and the Fünf Höfe CityQuartier in Munich,
our 300 properties worldwide boast prestigious
locations which tenants love to see on
their business cards. Our holdings also set
standards in terms of construction quality,
technical design and economic efficiency.
As an investor with a focus on the long term,
sustainability has been part of our thinking
for years. We believe that the long-term value
and quality of real estate is also defined by
sociocultural and ecological factors. Our port-
folio already includes a range of outstanding
properties certified in accordance with LEED,
BREEAM, HQE, DGNB or other recognised
schemes. We also apply our own Sustainable

Investment Check to every potential acquisition
and when reviewing our holdings.
Combining a holistic view with a close eye for
detail, we also have a strong focus on excellence
when it comes to supporting our tenants.
Through our own teams and working
closely with leading property management
companies, we are committed to meeting
the needs of some 6,300 tenants around the
world. They benefit from a flexible, superior
service – for us, it’s an investment in the
future.
Quality you can count on
Prime locations, stunning architecture, superb construction quality and
a high level of commercial viability – all these aspects inform our comprehensive
understanding of premium real estate. Our commitment to
high standards of property management and tenant support is similarly
uncompromising. By acting with foresight today, we can face the future
with optimism.
11

Highly professional fund managers with performance
responsibility translate portfolio
strategy into decisions that are implemented
by six dedicated asset management teams
covering Germany, the rest of Europe, the
Americas, Asia Pacific, shopping centres and
the hotel segment. These teams take care
of property acquisitions and disposals, manage
our holdings and handle lettings, aided
by their knowledge of local conditions and
excellent insights into the different investment
markets. Working closely with our pro-
ject managers and developers, they are committed
to enhancing our portfolio. Further
support is available from our Finance & Participations
unit and other specialist departments.

This organisational structure is fully aligned
with the investment process and has proved
itself in practice: in November 2010, we
again received a Scope Investment Award
for best management company in the openended
real estate funds category. Our business
model delivers maximum reliability and
transparency for customers and partners
alike and gives us the ability to handle complex
national and international transactions.
Clear structures and named contact persons
facilitate fast communication and decisionmaking.
They also create an excellent basis
for long-term business relationships built on
trust.
Clarity of purpose, clarity of structure
Operating in a complex sector calls for organisational transparency, clear
lines of responsibility and carefully crafted processes. As markets become
increasingly interlinked, real estate investment managers face formidable
challenges. Our response has been to adopt a focused business model
and a smart structure that enables us to leverage opportunities effectively.
13

Case Studies
14

Contents
Emporio, Hamburg:
taking a long view of investment 16
Birmann 24, Santiago de Chile:
three companies, one investment 20
Limbecker Platz, Essen:
a shopping magnet in the heart of the city 24
51 Fifty-One, Zurich:
flexible, sustainable, fully let 28
15

“As an investor with a focus on the long term, we always
plan for the future. This ensures that properties
we develop or acquire today retain their value and
continue to meet user requirements.”
16
Dr. Bernd Schade, Head of Property
Project Management, Union Investment
Emporio, Hamburg:
taking a long view of investment
The Emporio Tower is among Hamburg’s key architectural landmarks and
still known to many local people as Unilever House, after the multinational
corporation that had its German headquarters here from the 1960s
onward. When the tenant moved to a new location in mid-2009, one of
Europe’s most ambitious regeneration projects was launched. The listed
skyscraper is being refurbished with a strong focus on sustainability, a
new building added on the same site and the area opened up for public
access. Extremely high standards apply to the entire project. Under the
direction of Union Investment’s Property Project Management team, a
completely new quarter is emerging in the heart of the city.

The view is breathtaking: the 200 business
people who have met in the sky lounge are
enjoying the sunset and a panoramic view
of the city. They can look out on the Elbphilharmonie
and towards the river Elbe with
the cranes of the port terminal on one side,
and across the Alster lake to the city park
on the other. Later in the evening, from their
vantage point on the 24th floor they will
watch a fireworks display on the Outer
Alster to mark Hamburg’s cherry blossom
festival. Almost close enough to touch. But
only almost, because this scenario is still
some way off. The listed building is currently
undergoing comprehensive refurbishment
that will take until the end of 2011. The
event floor is still under construction.
The existing tower has always been a “high
point” in the Hanseatic city’s otherwise rather
unspectacular skyline. This is a skyscraper
with history: the reinforced concrete structure
with its three wings was designed in
the 1960s by leading architect duo Helmut
Hentrich and Hubert Petschnigg. Occupied
and named by Unilever, the building became
synonymous with the company. In 1989,
Union Investment acquired the property for
its open-ended real estate fund UniImmo:
Deutschland. As a typical example of the
kind of imposing architecture adopted by
businesses during Germany’s post-war economic
boom, the building was listed as an
architectural monument at the start of 2000.
Yet times change and even buildings age.
When Unilever started planning to relocate
its headquarters in 2006, Union Investment
was presented with an exciting opportuni-
17

18
ty. It quickly became clear that minimal updating
was simply not an option. Demolition
was also ruled out – partly due to the
building’s listed status but also because it is
much more sustainable to retain the existing
building fabric. Having carefully considered
all the possible courses of action, Union
Investment decided to fully refurbish the
skyscraper. The site would also be opened
up and enhanced by additional usages. The
entire undertaking was to be managed by
the company itself, with the Property Project
Management department taking the lead
role. “Emporio allows us to demonstrate our
expertise in project development and the
field of sustainability,” explains head of department
Dr. Bernd Schade. “Our team typically
provides technical services to Union
Investment’s operational divisions. In this
case, we are taking charge and coordinating
all the activity ourselves.”
That is no small task: planning complex existing
use redevelopments like Emporio calls
for exceptional foresight. It also requires experience,
something that Union Investment
has in abundance. Dr. Schade’s proven team
are also able to access the specific expertise
of other departments within the company
throughout all phases of the project.
The research department thus examined the
competitive situation and demand within
the Hamburg office market during the preliminary
stages. How much space is in the
pipeline? Which leases are about to expire?
What level should the rent be pitched at?
This analysis provided key pointers. Experts
from the lettings department assisted in formulating
a letting strategy. Whereas Unilev-
er was a sole tenant, Union Investment is
now consciously opting for a multi-tenant
strategy. This reduces letting risk but makes
greater demands on space flexibility. As a
consequence, project managers need to continually
update the usage concept during
the two-and-a-half-year construction period,
fine-tuning space arrangements and carrying
out regular profitability analysis. One
major advantage here is that each storey of
approximately 1,600 sq m within the skyscraper
can be divided into three separate
rental areas if desired. Cellular, open plan
or a combination of both – any floor plan
is possible, allowing highly efficient use of
space.
Alongside space efficiency, energy efficiency
is another crucial aspect of the refurbishment
work. “Properties that are not sustainable
barely stand a chance in the current letting environment,”
says Dr. Schade. Many multinational
corporations have made sustainability
part of corporate policy. A growing number
of mid-sized companies are also moving to
a greener stance. For Union Investment, sustainability
is not just a trend, it is embedded
in the company’s investment strategy. The
Hamburg-based fund management company
has even created its own Sustainable Investment
Check, which is used to evaluate each
acquisition and review existing holdings. The
objective is to ensure that all buildings meet
future requirements both effectively and sustainably.
The results at Emporio speak for themselves
and have certainly won over the future users.
The U factor for the new, energy-optimised

façade is 1.0 and the ventilation / air con ditioning
system has a heat recovery rate of
90%. In terms of basic supply, power consumption
is reduced by 22% and energy
consumption for heat by 64%. The listed
façade presents a particular challenge. Designated
an important visual landmark by the
city authorities, it must be retained. It has
been recreated 1:1 to meet the latest energy
standards and installed already via a painstaking
process of replacing individual ele-
ments.
The outlook is thus bright for both the
environment and future tenants. Hamburg’s
Neustadt area is likewise set to be nefit
from a new set of pathways. Where walls
previously enclosed and isolated the site,
the area will soon allow access from the
Laeiszhalle concert hall through to Gänsemarkt
square. Light art, landscaping and
restaurants/cafés will ensure a high-quality
user experience, inviting residents and
visitors alike to relax and unwind 24 hours
a day. The usage concept encompasses a
sophisticated mix of office space and catering
facilities in the skyscraper, with the
adjacent new build featuring apartments,
offices, restaurants and a hotel.
The latter will increase the area’s diversity
while at the same time minimising risk. The
concept, specification and facilities were developed
in conjunction with Union Investment’s
in-house hotel specialists. It is no coincidence
that the operator is Scandic Hotels.
Winner of numerous environmental awards,
this international hotel group has been committed
to sustainability for years, making it the
ideal partner for Union Invest ment. This development
underlines Union In vestment’s holistic
understanding of sus -tain ability. It is therefore
hardly surprisingly that the new hotel has
followed the high-rise block in being pre-certified
“Silver” by the DGNB. We are also aiming
for a LEED "Gold" certification for the tower.
Facts & Figures
Investor: Union Investment Real Estate
GmbH
Location: Neustadt district, Hamburg
Size of site: Approx. 13,000 sq m
When the first tenants move into their offices
at the end of 2011, Emporio will be
one of the most sustainable building complexes
in Hamburg. A listed landmark will
have become a high-profile example of
sustain ability in action, providing excellent
prospects all round. For future tenants,
High-rise block
Built: 1961–1963
Acquired: 1989
Refurbishment: 2009 – 2011
Height: 98 m/24 storeys
Floor space: 35,511 sq m
Uses: Offices + catering facilities
visitors and for the city itself, with Emporio
embodying Hamburg’s “Growth with Vision”
strategy.
New building
Architects: Markovic Ronai Voss (MRLV)
Type of building: 6 –11-storey building
with hotel, office and residential space
Hotel: Approx. 16,500 sq m (325 rooms)
Residential: Approx. 4,000 sq m
Offices: Approx. 835 sq m
19

“We have extensive experience of optimising property
investments worldwide and deploy proven processes
to resolve all the various issues. That is where
our strength lies.”
20
Alexander Eggert (left) and Dr. Martin Leinemann
Dr. Martin Leinemann, Head of Finance &
Participations (F&P), Union Investment
Birmann 24, Santiago de Chile:
three companies, one investment
When Union Investment completed its first investment in Chile in late
2006, it was once again breaking new ground. It was the first German
fund management company to enter the South American market, thereby
successfully taking forward its expansion strategy and building on experience
gained in the previous two years. The acquisition of Birmann 24
was anything but routine, though. It illustrates the potential complexity
of finance requirements, foreign exchange management and the structuring
and management of participations. Today, Union Investment manages
111 companies that hold properties worth a total of approximately
EUR 8.0 billion in 25 countries and 16 currencies around the globe.

The view is magnificent as the majestic snowcapped
Andes appear in the east, contrasting
starkly with the rich blue of the Atlantic. This
breathtaking vista alone would make the 12-
hour flight from Hamburg to Santiago de Chile
worthwhile. But the two experts from Union
Investment’s Finance & Participations unit
(F&P) are not here on holiday. Their mission is
to complete a sophisticated real estate deal.
Birmann 24, a 16-storey office building designed
by renowned architects Skidmore,
Owings & Merrill, was offered for sale to the
Hamburg-based fund management company
by brokers CB Richard Ellis as a corporate acquisition.
The timing is perfect. In 2005 and
2006 alone, Union Investment entered 11 new
national markets, a process which included
crucial pioneering work in Mexico. Further
investment in Central and South America is
planned to diversify the portfolio.
Chile ticks all the right boxes. Its financial and
legal system is almost on a par with Euro-
pean standards, the political environment is
stable and the economy is performing well.
The popular Las Condes office location in
Santiago and the Class A Birmann 24 property
have already been rated “promising” by
the asset management team. Macro and
microeconomic conditions as well as issues
around taxation and company law are also
subjected to careful scrutiny as part of a
“New Instrument Process” that takes place
before entering any new market. A comprehensive
battery of checks is performed under
the supervision of the central risk management
department to optimise the acquisition.
The go-ahead is finally given to enter Chile
as a new national market. The next task is
to implement the best possible investment
structure, financing and foreign currency
exposure strategy for Birmann 24.
Winter coats are packed away outside Santiago
airport and the team heads from the
west of this city of five million inhabitants
to the Las Condes district in the east. Here,
modern buildings dominate a Europeanlooking
cityscape. This established office
location is popular with international com-
panies. Birmann 24 offers around 24,000 sq m
of space and is fully let to leading firms such
as Microsoft, JP Morgan, UBS, Merrill Lynch
and Hewlett-Packard. The property’s vital
statistics fit the investment profile of the Uni-
Immo: Global open-ended real estate fund to
perfection. The size of the deal is also right.
With a purchase price of some EUR 48 million,
the building is typical of the scale of investment
in this location.
The fact that the experts from the Finance &
Participations unit are travelling to Chile reflects
the special circumstances and a core
strength. By the end of 2006, Union Investment
was managing 47 stakes in property
companies worth EUR 3.8 billion. The company
had thus long reached the critical mass
required to set up a special department dedi-
cated to optimising investment structures –
something that marks it out from many other
market players. At headquarters in Hamburg,
the final checks on financing the investment
are well under way. This is no everyday task,
even for seasoned professionals, because
Chile is one of the few countries with an artificial
currency. The UF (Unidad de Formento),
whose value is calculated daily by the Central
21

Bank of Chile, was introduced to cushion the
effects of sharp fluctuations in the exchange
rate and safeguard purchasing power. Although
now essentially obsolete, the UF remains
the standard currency unit for longterm
agreements in Chile.
“We’re dealing with an artificial currency, plus
the Chilean peso, while some rental payments
are made in US dollars. But we want to make
distributions to our investors in euros,” says
Dr. Martin Leinemann, head of the Finance
& Participations department, explaining the
complexity of the task. “The challenge is to
create a cashflow from the company that
delivers a stable Euro inflow into the fund.”
Following extensive analysis and countless
22
calculations, a solution is found: although the
fund management company has sufficient
capital, it uses a UF-denominated loan to
finance around 50% of the investment, thus
providing a natural hedge and benefiting
from the leverage effect in Chile. In order to
hedge operating income, forward exchange
contracts are used to cover the open currency
positions. The Hamburg-based company works
closely with its parent in Frankfurt to achieve
this, drawing on the latter’s strong background
in securities. Access to a high level of
expertise in the international money and
capital markets is invaluable when it comes
to complex issues relating to liquidity and foreign
exchange management, something that
once again proves to be the case here.
But back to Chile. The taxi finally pulls up outside
the post-modern Birmann 24 building on
the corner of Mariano Sanchez / Fontecilla No.
310. Chilean business partner Cassiano L. de
Goulart A. is already waiting in the elegant,
airy entrance area. He will subsequently become
asset manager, property manager and
company administrator. In the conference
room with its views across the Chilean cap-
ital, the three men discuss various options for
acquiring the holding. Birmann 24 had been
split for ownership purposes and belonged
to two Chilean companies. A number of possibilities
had been explored beforehand: buying
the property from the two companies, acquiring
the companies or establishing a third,
new company. Asset deal or share deal? In
many countries the issue doesn’t arise because
foreign investors are not allowed to
invest directly. Not so in Chile: here every option
is open. Union Investment chose a share
deal which involved setting up a new company
to absorb the two existing companies.
The advantages are compelling. Creating one
company saves on administrative expenses
and attracts less tax on an ongoing basis.
There will also be no tax on the purchase
transaction or any future sale. Although this
will be some way off, it is still a relevant factor
from an investor viewpoint. “It comes
down to the advantage of not paying tax in
the future,” says Alexander Eggert, head of
Participation Management at Union Invest-

ment, explaining the decision. There is also
another important aspect to consider – normal
market practice. “We always structure
our real estate investments using vehicles that
are common in the relevant national market
in order to facilitate our subsequent exit.”
The remaining details and outstanding issues
are quickly resolved. Because Chilean law
stipulates a minimum of two shareholders,
ownership is divided into two parts: Union
Investment Real Estate GmbH will acquire
99.9% of the shares and 0.1% will be transferred
to Union Investment Verwaltungsgesell-
schaft mbH, which is solely a special-purpose
entity. One investment, three companies, and
the deal is sealed.
An eventful day draws to a close and the
experts from Union Investment are satisfied.
The next day will see them return to wintry
Hamburg, where new tasks await them.
Their long journey has proved worthwhile,
though. Birmann 24 is just the start of the
company’s involvement in Chile. By mid
2011, Union Investment’s portfolio will include
five investments in the Andean republic
– all held through companies.
Facts & Figures
Investor: Union Investment Real Estate
GmbH (99.9%)
Architects: Skidmore, Owings & Merrill
Location: Las Condes, Santiago de Chile
Built: 1999
Acquired: December 2006
Type of acquisition: Corporate acquisition
Volume of investment: Approx. EUR 48 million
Rental area: 24,000-plus sq m
Main tenants: Microsoft, JP Morgan, UBS,
Merrill Lynch, Hewlett-Packard
23

“Thanks to our expertise and clear plans, we are
able to make decisions fast. We also have the financial
strength to continue optimising our properties
in line with market requirements. That’s a key factor
behind the long-term success of our shopping
centres.”
24
Lars Richter, Head of Asset Management
Shopping Centres, Union Investment
Limbecker Platz, Essen:
a shopping magnet in the heart of the city
The Limbecker Platz shopping centre and leisure destination opened
its doors in late 2009, instantly becoming Germany’s biggest inner-city
shopping mall and marking the start of a new era for the city of Essen.
For Union Investment, Limbecker Platz is a further jewel in its portfolio
of 32 shopping centres, lifting the share of malls in its real estate holdings
to around 29%. A dedicated asset management unit brings together
a level of expertise and experience in this segment that is
unrivalled among European property investment managers.

It is late afternoon on an ordinary weekday
at the beginning of March. The centre of
Essen is bustling with activity and shoppers
are strolling through the streets. Many people
started out at the new Limbecker Platz
shopping centre or are now on their way
back there. Covering 70,000 sq m, the mall
contains over 200 stores offering a comprehensive
array of merchandise. There are flagship
fashion outlets for well-known labels,
exclusive boutiques and small shops, an
entertainment electronics store, a “gourmet
zone”, a host of restaurants and cafés and
much more – all punctuated by light, space
and incredible flair. Many visitors travel by
car to take advantage of the ample parking.
There are also good bus and rail links.
Just like any other shopping centre, then –
only bigger? No! Limbecker Platz can rightly
claim to be unique. It is a stand-out development
in terms of its concept, exceptional
mix of sectors and impressive architecture,
but also with regard to its back story. A lively
marketplace has been created in the heart
of Essen, an integrated location that attracts
between 80,000 and 100,000 visitors a day.
For this city in the old industrial heartland of
Germany, it is one of the most important investment
projects of the past 60 years. Only
a few years ago, shopping here was a chore
rather than a pleasure. The prime site in Essen
city centre was occupied by a dilapidated de-
partment store and an empty fashion outlet.
Anyone wanting a stylish shopping experience
tended to travel to the nearby CentrO
complex in Oberhausen or the Ruhr-Park in
Bochum, thereby depriving Essen of significant
consumer spending. Regenerating this
established location was intended to send
out a clear signal. The plans put together by
ECE for a combined shopping centre and
leisure destination would make a grand archi-
tectural and financial statement befitting
a major city, with the new building costing
some EUR 300 million.
Union Investment came onboard in 2005,
taking a 60% holding in the project. The
company partnered with ECE Projektmanage-
ment G.m.b.H & Co. KG, which has a 15%
stake and contributes its experience of realising
more than 120 shopping centres across
Europe, and Karstadt Immobilien AG, which
owns the site and is the new shopping centre’s
main anchor tenant with some 24,000
sq m of space. For Union Investment, this
is a rather unusual three-way arrangement:
the company typically acquires completed
projects where costs are capped and the
developer provides rental guarantees and
has a minority holding of no more than 5 or
10%. “We saw tremendous potential in this
location and ECE’s concept was compelling,”
says Lars Richter, Head of Asset Management
Shopping Centres at Union Investment, commenting
on the decision to get involved early
on during construction and thus to take on a
higher level of project risk. It’s a move that
25

is paying off. “Rental income is around 10%
higher than planned, which has already
boosted the property’s value considerably.
Limbecker Platz is also a perfect fit with our
26
investment strategy.” The focus of investment
for the Hamburg-based fund management
company is on shopping centres in Europe,
particularly in Germany. Its retail portfolio
now includes 32 properties worth around
EUR 5.0 billion and is set for further diversification.
This reflects the fact that Europe is
the most stable market by a significant margin.
Richter and his team have also made
it an objective that all properties should be
accessible within a maximum flight time of
four hours. This is not about convenience,
but rather due to many years’ experience of
managing shopping centres. The team know
only too well how important it can be to get
somewhere fast. Shopping centres are simply
not comparable with office properties – much
more is needed in the way of hands-on management.
Experience, proximity and a feel for
the local situation are all essential.
This awareness and a high level of professionalism
proved invaluable during construction,
when the new centre was being built in
two separate phases. One part was demolished
and rebuilt while the other part was
still operating or had recommenced oper-
ation. This was a major logistical challenge
for all parties involved but everything went
smoothly thanks to meticulous planning.
When phase one was completed on schedule
in March 2008 and Karstadt moved into
its new premises, 80% of the entire project
had already been pre-let. In addition to wellknown
chains and “magnet” tenants found
in any shopping centre of note, a series of
regional retailers and smaller start-ups were
signed up. They round off the range of products
on offer and give the shopping mall its
individual flavour and unique character.
Centre management also plays a pivotal
role with regard to sensitive factors such as
achieving the right mix of tenants and presenting
the centre as an “experience”. Ongoing
maintenance and smooth operation
are equally important. As Union Investment
knows, this is what separates the wheat
from the chaff. ECE turns out to be the ideal
partner here. Few companies – if any – have
more experience of managing shopping centres.
The way to handle the project was thus
obvious from the start. As asset manager,
Union Investment primarily concerns itself
with maintaining and enhancing the value
of the property today and into the future.
For example, state-of-the-art energy saving
technology was installed at Limbecker Platz.
“We have done everything possible to keep
service charges to a minimum,” says Lars
Richter. Budgets for advertising and mainten-
ance available to the manager are agreed
at regular meetings and on visits. Ongoing
contact ensures good communication and

fast decisions. The Hamburg-based company
is also prepared to invest in modernising and
extending its properties. Should the competi-
tive situation change or restructuring prove
necessary, it is crucial to act quickly. Union
Investment is able to do this, which is un-
doubtedly another advantage of teaming
with a financially strong, experienced part-
ner.
Naturally, options for converting space to
new uses were considered during the planning
phase of Limbecker Platz. These kinds
of scenarios are still far in the future, though.
With its curved façade adorned with sequins
and evoking Marilyn Monroe’s famous dress
from “The Seven Year Itch”, the shopping
centre attracts tens of thousands of visitors
every day. Inside is a flurry of activity, combined
with people just unwinding and relaxing.
Walkways flooded with light alternate
with Mediterranean-inspired fountains and
quiet areas. The unique “metropolis concept”
based on Paris, Rome, Amsterdam and the
new, more confident Essen has proved hugely
successful.
The entire city is benefiting from the new
shopping centre's sparkle and not just at
night when the sequins are illuminated: since
the centre opened, a halo effect has been
felt in the surrounding area. Other buildings
have been modernised as neighbouring retailers
and property owners invest in a future
that, for Essen, has started at Limbecker
Platz.
Facts & Figures
Investors: Union Investment Real Estate
GmbH (60%), Karstadt Immobilien AG
(25%), ECE Projektmanagement G.m.b.H
& Co. KG (15%)
Architects: Henn Architekten, Munich, and
ECE Projektmanagement G.m.b.H & Co. KG
Start of construction: May 2006
Opened: March 2008 (phase 1)
October 2009 (complete development)
Rental area: 70,000 sq m on three levels,
200-plus stores, 2,000 parking spaces
Volume of investment: Approx. EUR 300
million
Catchment area: Approx. 1.7 million people
27

Philipp von Hindte, Matthias Gerloff, Rüdiger Wünscher (from left to right)
“Success doesn’t just happen. Our development
projects are the result of quality-driven selection and
careful risk assessment. Long-term letting viability is
and will always be our key investment criterion.”
28
Matthias Gerloff, Head of
Asset Management Europe, Union Investment
Fifty-One, Zurich:
flexible, sustainable, fully let
When Union Investment purchased the 51 Fifty-One development
project in Zurich-West in 2008, the property was not a viable letting
proposition in its intended form. But the fund management company
was aware of its huge potential, given the building’s exceptional
location in an up-and-coming district, excellent transport links and
outstanding development prospects. Thanks to the expertise and passionate
commitment of everyone involved, 51 Fifty-One is now ideally
equipped to handle a wide range of user requirements. What’s more, it
is already fully let to one of Switzerland’s most respected companies –
before it has even been completed.

At last it’s time to finish work and de-stress
after a busy day. The prospect is doubly
attractive if the “happening” district of
Zurich-West, with its rich variety of cultural
and culinary delights, is located right on the
doorstep. Rüdiger Wünscher, senior project
manager at Union Investment, has spent
many an evening in the area during construction
of the new 51 Fifty-One building.
He raves about the numerous options available:
“There’s a huge choice of quirky bars,
restaurants, galleries, clubs and theatres.
Alternatively you can just relax and unwind
in the local parks or work out in one of the
fitness studios.”
When Union Investment signed the purchase
agreement for 51 Fifty-One in September
2008, the project was still at the planning
stage. “The original development and planning
permission were geared towards a
specific tenant,” recalls Philipp von Hindte,
senior investment manager at Union Investment.
“As it happens, the tenant bailed
out before we acquired the project. The
Hamburg-based real estate specialist was
unperturbed, though – 51 Fifty-One clearly
offered exciting potential and the company
had the necessary expertise to create a
buil ding that would be attractive to tenants.
It was Union Investment’s first investment
in Switzerland: carefully selected, benefiting
from excellent transport links and with
outstanding infrastructural prospects.
Up-and-coming Zurich-West is being transformed
from an industrial area into a vibrant
destination buzzing with restaurants and
cultural activities. It already boasts attractive
living accommodation, and businesses are
also starting to feel at home there. “Large
companies in particular are upgrading their
locations for efficiency, process or straightforward
cost reasons, moving away from city
centres into buildings that have the latest
technology and lower management costs,”
says Philipp von Hindte, identifying an ongoing
regional trend typified by Zurich-West.
Marazzi Generalunternehmung accordingly
acquired the rights to develop the former
Coop distribution centre, one of the area’s
most prominent properties, into the 51 Fifty-
One office building.
Three years later and now completely revamped,
the structural phase is complete
and work on the rental space is in full flow.
The architecture is notable for its understated
29

elegance. Overhanging the three-storey base
is a four-storey block with a folded façade
whose refinement and subtle charm is most
obvious when shifting daylight plays on its
glass and metal panels. The spacious foyer
30
is quite literally a highlight: daylight floods
the soaring reception area via honeycomb
skylights and is reflected on the terrazzo floor,
creating a real wow factor. This effect is further
enhanced by the sculpture-like quality of the
stairs, dubbed “theatre stairs” by the project
team. The upper storeys have been designed
to accommodate a wide range of workplace
configurations in order to meet individual tenant
requirements with maximum ease.
This flexibility, a prerequisite for letting viability,
was sorely lacking when Union Investment
purchased the development in autumn
2008 and signed a general contractor agreement
plus rental guarantee with Marazzi.
“Our technical assessment of the project revealed
weaknesses in the planning,” recalls
Rüdiger Wünscher, “but we were convinced
they could be overcome through a concerted
effort by all parties.”
The biggest challenge facing the developers
after extensive site reclamation work was
to enable the necessary flexible usage and
thus optimise lettability. At 1.6 metres, the
original window grid was far too wide and
inflexible to make the building a competitive
prospect in the market. “The planned
projecting solar shading structures would
also have made it impossible to clean the
façade efficiently and thus driven up operating
costs,” says Wünscher, citing a further
stumbling block to the redesign. Thanks to
a proactive approach and close cooperation
with Marazzi throughout the planning and
construction phase, these obstacles were
successfully surmounted. The axial distance
is now 1.35 metres, which allows much more
effective use of rental space, while the solar
protection has been installed behind the
outer skin of the three-dimensional façade
structure.
The extent of the remodelling is apparent
inside the building, where the new concept
enables an impressively versatile office
struc ture featuring multi-functional space. In
addition to the reception area, the ground
floor can be used as a restaurant, or for retail,

infrastructure or logistics purposes. Similarly,
the first and second basement levels can be
utilised as shop or office space or for storage.
Further benefits of the new modular concept
include flexible footplates in the overhanging
upper storeys. From cellular to open plan, semiprivate
relaxation areas with cafe corners to
think tanks, the possibilities are almost endless.
Open, vertical crossing spaces support fast
communication and sharing of information
across multiple storeys. Although the building
was originally designed for a single tenant,
the storeys can now be divided into up to four
completely independent rental units if desired.
The foundations have thus been laid for the
long-term letting viability of the property.
Although new tenant Swisscom will actually
be occupying the entire building, the company’s
specific needs underline the appeal of
51 Fifty-One since its revamp. Thanks to the
building’s increased flexibility, the telecommunications
provider is ideally placed to
implement its “new work environments”
concept. The modern office building offers
various options for exchange and knowledge
transfer, and the work environment can be
quickly and efficiently adapted to change
processes. Swisscom will move some 1,600
staff into the 20,650 sq m building in 2012,
thereby consolidating several of its Zurich
locations. “51 Fifty-One meets our tough requirements
with regards to a modern service
building and enjoys an excellent location,”
says Martin Häusermann, CEO of Swisscom
Immobilien AG, explaining the decision.
Another factor in its favour was the fact that
the building was constructed with a strong
focus on sustainability. The ecological quality
of the property, which has been awarded
LEED “Gold” certification, is exemplified by
use of groundwater heat pumps to generate
heat and cooling.
Swisscom has benefited from making its
rental decision ahead of completion, supported
by Union Investment’s organisational
skills and flexibility. The new tenant’s requirements
and wishes were taken into account
at the shell and core stage, with the sprinkler
system being installed in the radiant ceiling
panels in accordance with the tenant’s
con figuration and all cables integrated in
the raised floors right from the start, thus
avoiding costly modification work at a later
stage. The proven team of Marazzi and Union
Investment worked closely with Swisscom’s
technical and business experts. A detailed
definition of the respective responsibilities
ensured speedy implementation and clarity
regarding warranties. Thanks to this comprehensive
support, all the parties involved in
Facts & Figures
Investor: Union Investment Real
Estate GmbH
Architect: R. Rast Architekten AG,
Bern
Location: Zurich, Switzerland
the construction work felt both confident
and positive about the project – a sentiment
shared by the tenant.
After a construction period lasting two and a
half years, the first Swisscom employees will
finally be able to sample the after-work opportunities
offered by Zurich-West in spring
2012. Possible venues for an evening meal
include Alpenrose, which features traditional
Swiss cuisine, and Gnüsserei, a former foundry.
One thing’s for sure: boredom is unlikely
to be a problem.
Built: 2009 – 2011
Acquired: September 2008
Uses: 7-storey office building
Floor space: 20,650 sq m
Tenant: Swisscom
31

Facts and Figures
32

At a glance
Investment locations of our properties
33

Union Investment Real Estate GmbH
Established:
1965
Management Board: *
Dr. Reinhard Kutscher (Chairman)
Dr. Heiko Beck
Dr. Frank Billand
Dr. Karl-Joseph Hermanns-Engel
Volker Noack
Shareholders:
Union Asset Management Holding AG, Frankfurt / Main
DZ Bank AG, Frankfurt / Main
WGZ Bank AG, Düsseldorf
Union Investment Institutional Property GmbH
Established:
1977
Management Board:
Wolfgang Kessler
Dr. Christoph Schumacher (Deputy Member)
Shareholders:
Union Asset Management Holding AG, Frankfurt / Main
R+V Lebensversicherung a.G., Eltville am Rhein
* As at 01.09.2011
34
Distribution of total portfolio by region and type of use
Asia
Americas
France
Europe *
Geographic distribution of real estate assets Distribution of real estate assets by type of use
Germany
Valuation in € m % Properties
Region 17,423.8 100.00 305
n Germany 7,376.8 42.34 163
n Europe * 4,778.8 27.43 73
n France 2,591.4 14.87 25
n Americas 1,814.8 10.41 27
n Asia 862.0 4.95 17
* Without Germany, without France
Business park
Logistics
Hotels
Retail
Residential
Office
Valuation in € m %
Usage 17,423.8 100.00
n Office 10,243.3 58.79
n Retail 4,884.2 28.03
n Hotels 1,503.9 8.63
n Logistics 367.0 2.11
n Business park 322.6 1.85
n Residential 102.8 0.59

Contacts
• Asset Management Germany + 49 40 34919 4843
• Asset Management Europe + 49 40 34919 4172
• Asset Management Americas + 49 40 34919 4439
• Asset Management Asia Pacific + 49 40 34919 4485
• Asset Management Shopping Centres + 49 40 34919 4187
• Asset Management Hotel + 49 40 34919 4834
• Property Project Management + 49 40 34919 4251
• Letting + 49 40 34919 4271
• Marketing, Communication + 49 40 34919 4160
This document is not intended for investors. The information and visuals contained in this brochure were prepared by Union Investment using its best judgement. The information was up-to-date at the time of producing the brochure and is subject to
change on a regular basis. Information regarding opportunities and risks associated with the funds must be taken solely from the latest prospectuses, contractual terms and the relevant annual and semi-annual reports.
All information current at 30.06.2011.
35

Union Investment Real Estate GmbH
Union Investment Institutional Property GmbH
Caffamacherreihe 8
20355 Hamburg, Germany
New address from November 2011:
Valentinskamp 70
20355 Hamburg, Germany
Phone + 49 40 34919 0
Fax + 49 40 34919 4191
E-mail service@union-investment.de
www.union-investment.com/realestate
September 2011