No. 2 | 2016 places spaces The Real Estate Magazine of Union Investment Risk management Real estate funds respond to the glut of liquidity Office worlds New spaces for creative thinkers Mexico An attractive place for investors Dynamic Structures Digitalisation is changing how spaces are used Investors view innovative retail as a good opportunity places spaces No. 1 | 2016 The Real Estate Magazine of Union Inv estment No. 2 | 2015 Observe Why real estate experts aren’t expecting a market downturn yet Evaluate spaces Why investors in Poland places are interested in more CONTENTS The Real Estate Magazine of Union Investment than just Warsaw Meet arkets plummeting The Emerald Isle is recovering How hotels surprise their Ireland has overcome the crisis that sent its property m guests with new worlds of experience Bustling office districts with an urban feel A look at successful office districts The euro falters rs COVER STORY The impact of exchange-rate fluctuations on investo 4 Retail properties Brick-and-mortar providers and lessors score with innovative retail and gastronomy concepts 11 Alexa International competition for the tenth anniversary of Urban Universe Investors are also fascinated by buildings the Alexa shopping mall in Berlin that combine many urban uses under one roof Show of strength Berlin’s office market is picking up – and is benefiting MARKETS from the German capital’s increasing economic power 14 Mexico Economic growth is stimulating the office and hotel real estate markets Dear readers, 18 Infographik Detailed look at Europe’s luxury miles 20 Risk management The ongoing glut of capital makes liquidity Welcome to places & spaces. management a determining factor Our real estate magazine, No. 2 | 2016 24 Investment climate survey The search for the right balance places spaces The Real Estate Magazine of Union Investment available in German and Risk management Real estate funds respond to the glut of liquidity Office worlds CONCEPTS New spaces for creative thinkers English, offers high-quality Mexico An attractive place for investors 30 Office concepts The response of investors and project develo- articles and information on pers to new trends such as coworking and desk-sharing the national and interna- 35 Urban Campus Interview with Christoph Schumacher, Member tional investment and of the Management Board at Union Investment Institutional Property GmbH letting markets. Dynamic Structures Digitalisation is changing how spaces are used 36 Façade advertising Letting façades for advertising – whether Investors view innovative retail as a good opportunity an LED screen or a mega-poster – is well worth it The subjects covered by the digital PORTFOLIO magazine are constantly being updated: 12 Deals How investors trade in real estate www.places-and-spaces.com REAL PEOPLE 26 Portrait Ulrich Dischler is Head of Asset Management Interna- As usual, you will find ordering and download tional at Union Investment Real Estate GmbH options for places & spaces as well as up-to-date 29 Interview Volker Noack, Member of the Management Board information about Union Investment on our at Union Investment Real Estate GmbH, on internal and external property management homepage. www.union-investment.com/realestate WIDE ANGLE 42 City tours Unusual insights into the culture and history of various cities I hope you have fun with places & spaces and look forward to hearing your views. 3 TO THE POINT 25 NEWS 43 PUBLISHING INFORMATION & CONTacT 43 ACQUISITIONS BY UNION INVESTMENT Kind regards, Cover picture Fabian Hellbusch Stephen Avenue, a major shopping street and pedestrian zone in the centre of Calgary, Canada, is famous for its exclusive restaurants, Head of Marketing and Communication shops, shopping centres and hotels. The white Trees sculptures are [email protected] designed to reduce wind gusts between the high-rises. places & spaces 2|2016 places & spaces 2|2016 CONTENTS TO THE POINT Taking the all-round view Reinhard Kutscher on the staffing challenges facing international real estate managers eing proactive is the key to our success – in every field and smartphones. In-house presentations, idea workshops, and of endeavour. Still, no other decision has more ramifica- job shadowing support the exchange of expertise and experiential tions than choosing the right staff. Only people can make knowledge. Interdisciplinary knowledge and leadership skills must Ba strategy successful, promote an idea, and surpass themselves also be promoted. Professional management and integrated pro- – or not. In-depth technical knowledge about the real estate cesses are particularly important since we cover the entire value capital market and quantitative and analytical skills no doubt chain of the real estate business. Employees who take an all-round provide a solid basis for real estate asset and real estate invest- view – who master the increasing complexity of the global real ment managers. Good communication skills and mastery of ide- estate business – will take the lead. Quantitative and digital skills ally several languages are also needed. But the real estate busi- will be in demand, along with the need to critically scrutinise fun- ness is changing rapidly, so the question is no longer “what can damental data and facts. an applicant or employee do?” but rather “what will he or she be able to do?” And there’s a reverse side to this coin: “What Structural change Market with prospects must a company be like if it is to recruit and retain employees of Online and offline retail businesses are Real estate investors are increasingly this kind in the future?” It is clear that the competition for talent striking out in new directions. Project de- interested in Mexico thanks to its stable has only just begun. Real estate asset and real estate investment managers must velopers and investors see opportunities. economic growth. be able to adapt to disruptive technologies that are radically Page 4 Page 14 changing old markets, creating new markets, or destroying exist- ing markets. This may cause a tenant’s perfect credit rating to go up in smoke overnight. Changing competitive situations as a re- sult of urban infill must be correctly assessed, along with ground- breaking innovations like 3D printing. Other fields of tension are the hotel industry and Airbnb or brick-and-mortar retailing and online shopping. Real estate managers must keep a weather eye on these in today’s digital world, along with the effects on their Reinhard Kutscher is Chairman of the Management tenants and properties. Board at Union Investment Real Estate GmbH. However, the notion that the profession will be fundamen- tally changed by disruptive technologies can safely be regarded Independent thinking and life-long learning about real es- as a myth. Building construction is still capital-intensive, and the tate are critical factors for success in this industry. This can start supply side is inelastic. The real estate market is subject to cycles during university studies, for example with degree programmes and sensitive to shocks from external events. Real estate manag- that combine technical and business skills, which we as a com- ers continue to act within those limits, creating added value for pany systematically foster and promote. And it continues with owners and users. Using new digital capabilities to do this is a professional support, for example the company’s academy, which normal development of the profession – and business models will is run internally by specialist employees specifically chosen and necessarily change as a result. upskilled to train junior staff. Our position as a market leader among German providers Independent thinking and life-long learning of open-ended retail real estate funds, our reliability as a busi- Brave new office world Companies will be successful if they are able to achieve synergy ness partner, and our firepower in more than two dozen national Digitalisation is changing office work. by combining the “skill sets” of younger employees with the long- markets all over the world are viewed favourably on the labour Desk-sharing and coworking are in vogue. er life experience – preferably over several market cycles – and market. We should consider ourselves fortunate to be in such a professional expertise of older employees, who have often been solid position at every level. But we should not rest on our lau- nvestment/Adele Marschner, Achim Multhaupt, Lucas Vallecillos/laif, WeWork Corp., Alamy/mauritius images Corp., WeWork Vallecillos/laif, Lucas Achim Multhaupt, nvestment/Adele Marschner, Page 30 I promoted to the executive level. A new approach will be needed rels. Our course for growth must be enhanced by competent, Successful asset manager for young talents who are members of Generation Y and grew up open-minded, motivated employees, and we’re all doing our very hotos: Union hotos: Ulrich Dischler knows what commercial P in a completely different environment with the internet, tablets, best to work towards this goal. • tenants want – all over the world. Page 26 2 places & spaces 2|2016 places & spaces 2|2016 3 COVER STORY From online to on-site Lively, colourful, unmistakable: this is how the ideal functioning retail site looks. Established brands are presenting themselves in different ways; innovative La dolce vita in all its colour over 4,600 square metres: the successful concepts offer variety. In the age of digitalisation, the Italian brand Eataly opened its first city centre is turning into an “analogue node”. European store in the Schrannenhalle in Munich. By Birgitt Wüst ataly E Photo: Photo: 4 places & spaces 2|2016 places & spaces 2|2016 5 ▶ COVER STORY any retailers are currently wondering whether their floor space concept is still the right one. Expansion plans are being reviewed and old tried-and-true re- Mtail concepts are being scrutinised. Investors and lessors are finding that some chains are reducing their floor space, while others are con- centrating on their core product range.