Rome set for investment surge on healthy deal pipeline

Over €500 mln of commercial real estate is about to change hands in Rome, marking a remarkable resurgence in the city’s property market.

The largest single asset currently up for grabs in the CBD area is a redevelopment project at Via Boncompagni owned by the Unicredit Immobiliare Uno investment fund, managed by Torre Sgr.

The landlord is currently in exclusivity to sell the 46,700 m2 mixed-use complex for a price of around €120 mln. The property is believed to have attracted strong interest, fetching over €1 bn worth of offers. First developed in 1971, the complex was bought by UIU in 2000 for €107 mln. It will include a mix of offices, residential, parking facilities and a congress centre.

Another redevelopment opportunity worth over €130 mln is currently up for sale on Via Tupini, in the southern Eur district, while two headquarter office schemes are being sold along the Cristoforo Colombo route.

French asset manager Amundi, through its Amundi RE Europa fund, has launched the sale of the head office of mobile network operator H3G Wind, which it bought in 2011 for just over €52 mln. Amundi has mandated C&W to market the 14,200 m2 complex which is currently fully let with annual rents approaching €4 mln.

Similarly, Italian property services firm Prelios has just put the 15,000 m2 head office of publishing group L’Espresso on the market.

Asset manager Investire Sgr is currently in due diligence on a six-asset office portfolio known as Project News. The portfolio provides a total of 42,000 m2 in the city centre and includes a fully-let historical building, situated in the vicinity of the Quirinale, as well as two further fully leased assets; two partially let properties and a 15,000 m2 vacant office building to be redeveloped to residential accommodation.

C&W is marketing the assets to national and international investors both as a single portfolio as well as individually, given the varied risk profile (core and value-add). ´Investor appetite for the Rome market is strong and opportunities of this kind are rare, if not unique,' comments Carlo Vanini, head of capital markets Italy and of the Rome office at Cushman & Wakefield, which boasts an office in the city with a 25-strong staff.

While the Italian capital has historically attracted fewer investors than the more business-friendly city of Milan, the recent pick-up in activity is largely owed to the higher returns offered and a modest availability of core and value-add stock.

‘The market has certainly become more dynamic recently both on the occupier and on the investment side,’ Vanini admits.  ‘I hope this will trigger new speculative development and the subsequent delivery of prime institutional quality product which still is very limited.’ According to the advisor’s estimates, only circa 120,000 m2 of real estate boasts an environmentally-sustainable certification out of over 10 million m2 of office stock in the city. ´This is the real window of opportunity for all the investors which are starting to include the 'eternal city' in their investment plans,´ Vanini adds.

The recent string of sales mandates builds on the positive momentum experienced by the Italian capital over the past few months, when several new players have made an entry into the market. They include US investment group King Street Capital Management which in late last year joined forces with local asset manager Kryalos to reconvert a 10,250 m2 historic office building on Via Liguria, near the famous Piazza di Spagna tourist destination, to the first W luxury hotel in Italy.

Similarly, US group Blackstone is believed to have acquired two office buildings in the CBD area while another undisclosed US fund earlier this year purchased a building in the EUR Tintoretto district for over €25 mln. ‘In the office sector, investors’ interest is very much focused on the city centre and on the EUR district, while the impression is that well-let assets in other areas still suffer from a mismatch between buyers’ and vendors’ expectations,’ Vanini says.


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