M&G Real Estate, the real estate fund management arm of M&G Investments, has acquired 9-11 Via Pola, a 16,500 m2 prime office asset in the Porta Nuova central business district (CBD) of Milan, for €136 mln.
The acquisition was made on behalf of the M&G European Property Fund managed by David Jackson and Simon Ellis. The vendor is Barings Real Estate European Value Add Fund, a fund advised by Barings.
Located a short distance from Milan’s Central and Garibaldi railway stations, the development is close to three Metro lines and is expected to achieve an LEED Gold rated building upon completion. It is already 85% let to a range of well-known businesses, including Regus, Willis Towers Watson and Munich RE.
David Jackson, fund manager at M&G Real Estate, said: 'We continue to purchase high quality core assets in Italy as part of our pan-European strategy, with a particular spotlight on northern Italy, which has stronger macro drivers and market fundamentals.
'This acquisition is consistent with our focus on stronger CBD office locations with low vacancy and attractive long term rental growth prospects. The Porta Nuova district of Milan certainly falls into this category, with strong tenant demand, and current vacancy at just 2%.'
Luigi Miranda, associate director – asset management, at M&G Real Estate, added: 'We are looking to identify the best acquisition opportunities within Milan’s dynamic property market, capitalising on the relative scarcity in investment-grade product relative to demand. Limited speculative developments and strong demand for quality spaces are reducing grade A vacancy rate to an ever-lower level, bolstering prime rental values within both the historic central business district and Porta Nuova.'
Gunther Deutsch, managing director, head of Real Estate Transactions – Europe for Barings, said,'This transaction marks the first “turn around” and sale of a value-add asset that we advised on in Italy on behalf of our pan-European value-add investment strategy. With a sizeable pipeline and additional assets to be sold in the coming months, we look for ways to continue to demonstrate our commitment in this market. We remain interested in identifying assets from core+ to value-add in the office, logistics and high-street retail sectors.'