Blackstone finalises sale of Milan trophy asset at record yield

US asset management giant Blackstone has completed the sale of a 13,800 m2 newly-renovated trophy asset in the heart of Milan to a consortium of ultra high-net-worth individuals led by Mediobanca.

PropertyEU reported in October that Mediobanca emerged ahead of investors including Deka, Allianz and PGIM in the race to buy the historic Post Building in Milan’s central Piazza Cordusio. Blackstone and its local partner Kryalos sgr secured a price of €247 mln, setting a new record yield of 2.8% for the Italian market.

Known as Project Ermes, the sale was managed by advisors Eastdil Secured and Vitale.

Blackstone bought the asset vacant back in 2015 and has since completed an extensive €23 mln refurbishment programme of both the internal and external areas to restore the property’s historical magnificence, repositioning the asset to the highest quality standards. The complex, which houses Starbucks’s first Italian store and the first Starbucks Reserve Roastery in Europe, meets the latest environmental and energy consumption requirements with a LEED Gold certification.

Located at Via Cordusio 1-3 in the centre of Milan’s financial district on a 100% freehold site, the complex was originally built in 1901, and listed as a historical landmark in 1962. It initially housed the Milan stock exchange then the headquarters of Poste Italiane until 2011.

Current major tenants in the nearly-fully-let building include JP Morgan, Natwest and Kryalos, which all use it as their Italian headquarter location. Blackstone’s Italian partner and occupier in the building Kryalos Sgr oversaw the asset management and renovation of the asset.

‘The disposal of the Piazza Cordusio asset is part of the strategy of enhancing the real estate assets of the Pacific 1 Fund and confirms the success of the establishment of club deals aimed at income real estate investments, showing how in the current economic context real estate is extremely interesting compared to other investment asset classes,’ said Paolo Bottelli, Chief Executive Officer of Kryalos SGR.

‘This is Mediobanca's third real estate club deal in just over a year,’ commented Dino Gioseffi, Mediobanca's Coverage Larg Corp & head of Real Estate. ‘Having completed such a prestigious operation - the main one in the real estate sector - in a year like 2020 characterized by the pandemic, confirms our exclusive ability to identify iconic properties with solid and quality lessors, structuring and following the entire process of acquisition according to market best practices.’

‘With this transaction, we renew our commitment to identify and create investment solutions in the real economy,’ added Angelo Viganò, head of Mediobanca Private Banking. ‘At a time with interest rates at their lowest, direct investments in prestigious income properties represent an opportunity in terms of diversification and returns, as demonstrated by the growing interest of our Ultra-High-Net-Worth clients in alternative financial solutions in real estate like club deals.’


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