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No. 1 | 2016 places spaces The Real Estate Magazine of Union Investment Observe Why real estate experts aren’t expecting a market downturn yet Evaluate Why investors in Poland are interested in more than just Warsaw Meet How hotels surprise their guests with new worlds of experience Urban Universe Investors are also fascinated by buildings that combine many urban uses under one roof No. 2 | 2015 places spaces The Real Estate Magazine of Union Investment The Emerald Isle is recovering markets plummeting Ireland has overcome the crisis that sent its property Bustling office districts with an urban feel A look at successful office districts The euro falters CONTENTS The impact of exchange-rate fluctuations on investors COVER STORY No. 1 | 2016 | 2015 places No. 1 spaces The Real Estate Magazine of Union Investment Observe spaces Why real estate experts 4 Mixed-use Buildings that combine various uses under one places aren’t expecting a market The Real Estate Magazine of Union Investment downturn yet Evaluate Early bird Why investors in Poland roof are increasingly popular Why it is worthwhile are interested in more to invest in hotel projects than just Warsaw Premier league Meet What unites the office cities of How hotels surprise their London, New York and Tokyo guests with new worlds Constant flow Show of experience How data management fits into the real estate business of strength Berlin’s office market is picking up – and is benefiting MARKETS from the German capital’s increasing economic power 12 Market cycle Will the current property boom soon come to an end? What experts and investors expect 18 Poland The Eastern European country also offers interesting Bridging Urban Universe the gap Investors are also fascinated by buildings that combine many urban uses under one roof investment opportunities outside the capital The strategies property investors follow to balance security and risk 27 Investment climate survey Portfolio transactions are increas- ingly attractive to international property investors Dear readers, CONCEPTS Welcome to this new edition of places & spaces. 22 Infographic A lot of office space for little money in Berlin; it’s the other way round in Tokyo. An overview of space and costs Are you interested in trends, products and developments 24 Smart City Vienna has enacted a long-term programme that on the national and international investment and letting will change its urban development markets? If so, you’re holding the right magazine in your 28 Digitalisation Real estate schools are researching big data’s hands – places & spaces gives you a full range of chances of success background information, opinions, and facts from the 36 Lifestyle hotels The creative ideas hotel operators use to sur- real estate industry. prise their guests and why they’re successful The articles from both the German and English editions of REAL PEOPLE our real estate magazine are now available on their own 30 Portrait Eric Cheah is expanding Union Investment’s property website. The great thing is that the subjects covered by the portfolio in the Asia-Pacific region digital magazine are constantly being updated, and you will 33 Americas Union Investment gains a new investment manager also have access to the most important articles from back and has major plans for North and Latin America issues. Bookmark the website – you won’t regret it. PORTFOLIO www.places-and-spaces.com 34 Yield What control options real estate fund managers have to As usual, you will find ordering and download options for increase performance places & spaces as well as up-to-date information about Union Investment on our website. WIDE ANGLE 42 Maps Whether analogue or digital – maps show the way www.union-investment.com/realestate through the urban jungle Whether you go for the analogue or digital edition, I hope you have fun with places & spaces and look forward to 3 TO THE POINT hearing your views and suggestions. 27 NEWS 27 PUBLISHING INFORMATION & CONTACT 43 ACQUISITIONS Cover picture Kind regards, The Shard in the London Borough of Southwark is 310 metres high, making Fabian Hellbusch it one of the tallest buildings in Europe. This mixed-use building, which fea- Head of Marketing and Communication tures 11,000 glass panels and an innovative pyramid shape, includes offices, shops, luxury apartments, restaurants and a hotel all under one roof. [email protected] places & spaces 1|2016 places & spaces 1|2016 CONTENTS TO THE POINT Equation with one unknown Frank Billand on the distinctive features of the current property cycle and their consequences xperienced property investors know that trends for com- programmes used by countries in the euro zone, as well as the mercial real estate markets are cyclical and that every by the United States and the United Kingdom, to support their upswing phase is followed by a downswing period. Those national economies. Then there are the very low interest rates Etrends generally parallel the economic developments in each – more significant because of their historical uniqueness – de- economic area, which in turn are influenced by the world eco- creed by the powerful central banks of the industrialised coun- nomy. Second, we have learned that the property market re- tries over the past few years. We all know how much pressure sponds to changes later than other sectors do. Users of office the low-interest environment, which has lasted for many years and retail space must experience a recovery before property now, has put on global institutional investors and that a good owners and project developers will profit. portion of the current boom on the property investment mar- Third, the received wisdom is that a cycle normally lasts kets is due to the lack of alternative investments offering a sim- Under one roof Under observation seven to eight years, with the recovery and bottoming-out ilar yield-risk profile. Properties that combine many How long will the real estate boom last? phases both being four years long. But are the national eco- different uses are increasingly Experts are asking themselves. A look at nomies really operating normally at present? And in this age of globalisation, didn’t cyclical fluctuations on the national popular. the general mood in the industry. property markets converge a long time ago? Particularly since Page 4 Page 12 they are increasingly intermeshed with the global capital mar- kets? Could it be that in the foreseeable future we will be deal- ing only with one property market that moves in lockstep all over the world? A hypothesis with consequences If so, that would have major consequences for globally active investors – and particularly their diversification strategies. They are based on the understanding that markets move differently: one might be headed for a peak and offer good selling oppor- tunities, while another will have just bottomed out, leading to Frank Billand is a Member of the Management Board at attractive opportunities for entry. Union Investment Real Estate GmbH. Experience over the past few years has given a boost to the hypothesis of converging cycles. The impression is that the global The answer to the question of whether the current cycle oogte/laif, Werner Dieterich/Westend61, Dieterich/Westend61, Werner oogte/laif, property markets – following the subprime crisis in the United differs from past cycles therefore primarily depends on future H States and the upheaval on the financial and capital markets interest rate trends. And initial differences – although still mod- ollandse largely caused by it – slipped into recession almost concurrently. est – among interest rates in the United States, the United King- H nvestment/Jürgen Müller I On our own continent, the euro crisis that began in 2010 fur- dom, and the euro zone are starting to take shape. Different ther weakened the property market in the common currency opportunities could result from this. We observe that the mar- uber; Photos: Photos: uber; otels, Union otels, H H area – and the consequences there, too, were primarily, but kets were affected quite differently by the crisis and that they Our man in the Far East certainly not exclusively, limited to a few markets, particularly are currently still in very different stages of recovery, even if Eric Cheah is expanding Union in southern Europe. The recovery that has been taking shape they are able to converge over the next 18 months. And even Investment’s property portfolio in since about 2014 is also proceeding in parallel on many mar- if the low-interest environment should continue, cyclical fluctu- kets, and the perception seems to be that any differences are ations in price levels and thus in initial yields will still be very tephan Lemke for 25hours tephan Lemke the Asia-Pacific region. A profile. S minor. The reasons are obvious – and they also describe the likely. Skilfully taking strategic advantage of these cyclical fluc- Among friends distinctive features of the current property market cycle. The re- tuations therefore remains one of the most important tasks of Page 30 tefen Chow, Creative hotel operators have Massimo Borchi/Bildagentur Cover photo: S covery is driven by the different more-or-less efficient assistance professional real estate investors. • some surprising new ideas. And guests seem to like them. Page 36 2 places & spaces 1|2016 places & spaces 1|2016 3 COVER STORY The Shard in London, 310 meters high, is one of the tallest multi-use buildings in the world, with offices, restaurants, shops, a hotel, and ten luxury apartments spread over 87 storeys. 24/7 instead of nine-to-five Living in city centres is now more popular than ever, office workers prefer urban locations, and industry also wants to shift its production sites into urban areas. Hence the popularity of mixed- use buildings, a property type often seen in major international cities.

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