Hines, the international real estate firm, has entered a joint venture with PGGM, the Dutch pension fund service provider, to launch a separate account programme primarily targeting high-street retail, office and mixed-use value add developments in Milan, Italy.
Hines will co-invest alongside PGGM into the account, which has an initial commitment of €155 million of equity, supported by moderate debt finance, and is expected to grow as further capital is deployed.
Targeting prime assets in the heart of the historic city of Milan, the account is committed to pursuing a sustainability agenda through refurbishment of assets to meet the highest international standards of building energy efficiency, to upgrade the quality and enhance their value, in-keeping with Hines’ philosophy to real estate development.
PGGM and Hines have already completed the first acquisition for the account, purchasing a portfolio of three buildings from Banco BPM for €110 million. Alongside the 10-storey Piazza Liberty tower in the centre of Milan, the portfolio includes two buildings in the historic centre on Via del Lauro and Via Mazzini. The three assets provide a mix of retail and office amenities.
With a total surface area of 20,000 square-metres, the three buildings will undergo an extensive €30 million refurbishment and renovation programme to transform the buildings into high quality, contemporary high-street retail and office spaces to meet current demands.
Lars Huber, CEO for Hines Europe, said: “Hines and PGGM have a long relationship, developing real estate together since the 1980s. PGGM are a trusted, highly respected partner and we are pleased to be extending our relationship through this account. We are pleased to have launched this account in parallel with the first joint acquisition, and look forward to growing it further.”
Tinka Kleine, Senior Director Private Real Estate for PGGM, said: “Milan has become part of our city focused investment programme because it offers great investment opportunities, both for achieving attractive financial returns and for improving the sustainability performance of well-located assets. Hines’ track record in securing and executing such strategy provides a perfect base for a successful partnership in Milan.”
Mario Abbadessa, Italy Country Head for Hines, adds: “We are very pleased to have earned PGGM’s trust. This will allow us to continue Hines’ focus strategy on permanent locations in Italy into which we have invested around € 1 billion over the last 18 months. Historical, high-quality buildings in prime locations are generally resilient to Italy’s political and economic volatility and Milan is one of the most attractive cities in this respect.”
On the account’s first acquisition, Vitale&Co has acted as financial advisor, Legance as legal advisor and Reas and Studio Asti as technical advisors.
Source : Company