The acquisition is being made for open-ended real estate fund immofonds 1, which is marketed solely in Austria. The vendor, the Geiger Group, is also handling the extensive development and upgrading of the building.
“Nürtinger Tor is a good example of how the conversion of an existing building into a well-positioned, sustainable and taxonomy-compliant local shopping property can succeed. Instead of demolishing the property and building a new one, the decision was taken to extensively refurbish the existing building while retaining the load-bearing structure, thereby saving grey energy. Repurpose of properties needs to play a more prominent role in efforts to achieve climate targets and meet rising ESG requirements,” said Henrike Waldburg, head of Investment Management Global at Union Investment. This view is shared by Roman Höhne, head of Geiger Projektentwicklung’s local office, who added: “The refurbishment of Nürtinger Tor is an excellent example of how the Geiger Group is able to successfully deliver on its corporate goal of sustainability.”
During the refurbishment, the property will be stripped back to its load-bearing structure. It will then be completely reconstructed, including the building envelope and technical services. Transformation of the existing building in this way is taxonomy compliant and the aim is to achieve an EPC A rating on completion.
Nürtinger Tor offers a total rental space of 9,400 sq m and is currently 98 percent pre-let. The center’s anchor tenants are Media Markt and food retailers Aldi Süd and Denn’s Biomarkt. The tenants on the upper floors comprise a fitness studio, two medical practices, and a rehabilitation center. The tenant mix is rounded out by two food units and a shoe retailer.
“In the current market environment, our focus within the retail segment is on high-quality defensive investments that generate stable cash flow. Accordingly, we intend to continue expanding our portfolio through targeted acquisitions of grocery-anchored daily-needs providers in integrated locations,” said Roman Müller, Senior Investment Manager at Union Investment.
“Repositioning this 1970s building and ensuring its viability for future decades was obviously a challenge, but we met it successfully together with teams from our turnkey construction, environmental and structural rehabilitation departments,” said Martin Berghofer, managing director at Geiger Projektentwicklung GmbH & Co. KG.
Union Investment was advised on legal aspects of the transaction by CMS, on tax matters by Norton Rose Fulbright, on technical aspects by albrings+müller, and on environmental issues by CDM Smith. The Geiger Group was advised on legal and tax aspects by Munich-based law firm ZIRNGIBL Rechtsanwälte Partnerschaft mbB. The purchase was brokered by Grüneberg Property GmbH.