Principal acquires prime Milan office property for Principal European Office Fund
Principal Real Estate Europe, acting as the asset and transaction manager of the Principal European Office Fund, has acquired an office property in Milan’s prime office district from Amundi Real Estate Italia SGR. The purchase price of EUR34 million reflects a net initial yield of 4.4 per cent.
Located at Via Giovanni Battista Pirelli 18, between the Porta Nuova central business district and the central railway station in Milan, the 7,000 sqm office building is fully let to a single tenant below the current market rate on an unexpired lease term of four and a half years.
Paul Muno, Managing Director and Head of Investor Relations Germany at Principal Real Estate Europe, says: "This latest acquisition in Italy highlights our team’s ability to source high quality buildings with excellent potential for value and income enhancement against the background of an extremely competitive market. We are currently experiencing an uptick in interest from international investors keen to deploy capital to buy attractively priced assets in Italy.”
The Principal European Office Fund is a balanced, geographically diversified office property fund with long-term value stability. The focus of the investment strategy is on high-quality European properties in excellent locations. With a target volume of EUR600 million, the fund has already invested in Amsterdam, Lisbon, Milan, Paris and Toulouse.
Cushman & Wakefield advised Principal on this transaction. Legal advice to the purchaser was provided by Jones Day, with BonelliErede acting for the vendor. Technical advice was by Yard, and Ernst & Young were responsible for taxation issues.