Benson Elliot moves into Italy with investments in Rome and Udine
Benson Elliot has acquired Via Aurelia 278 in Rome and Terminal Nord in Udine (northern Italy) through the acquisition of 100 per cent of the units in funds managed by Europa Risorse SGR.
Via Aurelia is a 62-unit luxury residential development in the centre of Rome, while Terminal Nord is a locally dominant retail centre in the north of Udine.
Benson Elliot’s investment reflects the firm’s confidence that Italy has turned the corner and is on the way to recovery, and its intention to be an early and significant mover in the country’s property markets.
It follows Benson Elliot’s decision in 2011 to be an early entrant into the recovering Spanish market, with the firm’s Cornerstone project in Barcelona. Benson Elliot announced last month that it had concluded Barcelona’s largest letting in more than a year to ADP, a global leader in outsourced services and human resources management.
Marc Mogull, managing partner of Benson Elliot, says: "It’s time. The Eurozone crisis has receded, and we’ve seen Italian sovereign spreads fall 500 bps in just a couple of years. It’s inevitable that this shift in investor sentiment, combined with an improving economy, debt markets that are slowly healing and the expectation of political change will drive a recovery in property markets. Investing in Italy has presented challenges for many foreign property investors, but that’s often boiled down to weak local market understanding and poor execution. We believe our long-term involvement in Italy, and our successful long-term relationship with Europa Risorse, mitigates many of those risks.”
Antonio Napoleone, managing director, Europa Risorse, says: “I’m very pleased to again be working with Marc, and now with Benson Elliot. We formed a great partnership in the last decade, managing a portfolio that ultimately grew to EUR800m. During the past few years [Benson Elliot senior partner] Joseph De Leo and [Benson Elliot Italian principal and country head] Leopoldo Andreis de Gregorio have been fully engaged in the Italian market, working hand-in-glove with us to watch the market and evaluate opportunities, and positioning Benson Elliot to act decisively when the right opportunity came along. We are looking forward to working with them, and with the whole Benson Elliot team, as we move these two exciting transactions forward.”
The SGR has acquired the Via Aurelia residential development scheme comprising two buildings on a 10,000 sqm hill-top site in the attractive Aurelia area in the west of Rome. With all building permits in place, the property represents an attractive opportunity to deliver a luxury, c.EUR100m end-value project in Italy’s largest residential market. The property was acquired from a private Roman family, who previously used the existing buildings, currently vacant, as a private hospital.
The Aurelia area is an established residential neighbourhood situated 700 metres from the Vatican, offering good transport links via the metro system and road network. The site benefits from a central location and impressive views across Rome, including the nearby Vatican and St Peter’s Church, and the Castelli Romani hills to the south of the city.
The business plan involves demolishing the existing buildings and developing between 62 and 78 large luxury apartments across four new buildings, in a gated community, with direct access to an underground car park (107 spaces), a gym and spa, terraces, communal gardens and 24-hour security. The development is expected to take two years to complete, with construction starting in Q3 2014.
In its second transaction, the SGR has acquired the Terminal Nord Retail Park in the northern Italian city of Udine from Pillar Retail Europark Fund, a closed-end retail fund advised and majority owned by British Land.
Opened in 2008, Terminal Nord is a modern retail park prominently located in Udine’s prime out-of-town shopping location. The 32,340 sqm park provides 38 single-level units together with a 2,100 space car park and a detached food court. It is currently 95 per cent occupied, and is anchored by a 9,600 sqm Carrefour hypermarket. Other significant tenants include Decathlon, Globo, Euronics and OVS.
Europa Risorse SGR has identified a number of value accretive asset management initiatives to maximise the park’s income. These include letting up currently vacant space, extending leases with existing tenants, reconfiguring and improving some of the retail units and public areas, and introducing additional retail pods.
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