The Italian Real Estate Market in October

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World Capital and Nomisma reported promising results for investments in retail despite the lockdown. Considering the market in Milan, commercial properties located in high streets and secondary streets recorded respectively average gross yields for 3.3% and 5.7%. Fashion is seen as a safe investment, while bank branches and restaurants have lost appeal since there are fewer people around due to lockdown and the rise of smart working. Supermarkets have gone in the last ten years from 7.5% to 5% yields. However, the demand hasn’t reduced, as they’ve shown to be able to generate revenues also in critical times despite the lower returns.

Concerning tourism, Thrends and Nmtc estimate that the Italian hospitality sector risks to see its revenues reduced by 50-65% due to the pandemic. The absence of international tourists resulted in the closure of many hotels in the main cities. In July, 44% of the five-star hotels in Rome, Milan, Florence and Venice were closed. Moreover, the ongoing pandemic and the travel restrictions don’t allow to make an optimistic prediction for the future.

Residential

Kia-Kuwait Investment Authority, the Kuwait sovereign fund, will be the co-investor together with Hines for the development of Unione Zero, a part of the wider requalification project of Milanosesto (1.5 million Sq m). Hines and the Fund will invest 500 million € in the area, which covers about 250,000 Sq m, to implement 11 buildings accommodating offices, hotels, apartments for rent, student halls and social housing.  Works will start by June 2021.

Borgosesia RE will develop a residential complex in the province of Milan on behalf of a company operating in the NPL sector. The asset is partly completed but left unused for quite some time. Borgosesia RE will requalify the area and proceed with marketing the residential units.

Offices

Kryalos SGR granted an exclusivity period to Mediobanca to sell its trophy asset in Piazza Cordusio (Milan) to a club deal of investors for 246.7 million €. The building, the former central office of Poste Italiane, currently accommodates tenants such as Starbucks, JP Morgan, Natwest and the same Kryalos.

Banks

Unicredit sold an NPL portfolio named New York to Illimity for a nominal value of 692 million €. The portfolio includes secured loans relating to Italian SMEs.

Retail

Through its fund Chronos, Kryalos SGR completed the acquisition of two shopping centres: Il Ducale in Pavia and Costaverde in Campobasso. The two assets cover a total surface of 34,000 Sq m.

In Bari, the historical Palazzo Mincuzzi has been sold to an undisclosed company from Puglia for 18 million €. According to the agreement, the Benetton store will continue to occupy the building.

Logistics

Invesco sold to Allianz Real Estate the logistics hub named Broni Logistics Park in the Province of Pavia. The asset covers a surface of about 150,000 Sq m and is entirely leased to companies operating in the logistics, retail and cleaning sectors.

Land

Amundi RE Italia SGR finalised the sale of the last assets on its Fondo Europa consisting in a land lot in Basiano (Milan), for about 35,000 €.

B-Exclusives

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