LONDON, Sept 1 (Reuters) - German real estate fund manager Union Investment said on Tuesday 1 September it has bought the Mercado shopping mall in Hamburg for 164 million euros ($235.5 million) in Germany's largest individual property deal so far this year.

Photo: www.union-investment.de

Union has bought the mall from a joint venture between Italy's Pirelli & C. Real Estate SpA (PCRE.MI) and Morgan Stanley Real Estate Investing (MS.N), for investors in its UniImmo:Deutschland open-ended property fund.

"The acquisition of Mercado means a further strengthening of our portfolio of centrally located shopping centres that, with very high degrees of occupation and crisis-proof yields, have developed into the stable anchors of our real estate investment fund," Frank Billand, a member of the executive board of Union Investment Real Estate AG said in a statement.

Pirelli & C. Real Estate Deutschland will retain responsibility for the management and leasing of the centre.

The Mercado was built in two construction phases in 1995 and 2003 and attracts 30-35,000 shoppers a day, Union said.

It is located in the central pedestrian area of Hamburg's Altona-Ottensen quarter, adjacent to Altona station and comprises 24,000 square metres of retail floorspace.

Union Investment Real Estate AG manages about 16 billion euros of real estate in five open-ended funds for private and institutional investors.

(Reporting by Sinead Cruise; Editing by Andrew Macdonald) ($1=.6964 Euro)