Värde secures €113m loan for major Milan regeneration project

US private equity firm Värde Partners and Italian joint venture partner Borio Mangiarotti have secured a €113.5 mln loan from lenders Intesa Sanpaolo and Banco Bpm for the development of the SeiMilano site encompassing 300,000 m2 to the south-west of Milan.

Värde Partners joined forces with Borio Mangiarotti in late 2017 to develop the mixed-use project, representing a total investment of over €250 mln.

Thanks to the loan, the project enters its second phase, involving the development of around 500 residential units, the two landlords said. During Phase I the remediation works were completed and all permits were obtained.

In total, the masterplan signed by architect Mario Cucinella entails the development of 100,000 m2 of housing, 30,000 m2 of offices and 10,000 m2 of ancillary retail facilities within a new urban park of over 16 hectares, the second largest in the Milan area.

A year ago Värde and Borio, through their Proiezioni Future joint venture, agreed to sell the office element of the project to Orion Capital Partners' European Real Estate Fund V, for a total investment of over €100 mln.

Värde Partners has a 90% share in the joint company while Borio Mangiarotti, the original owner of the site, has a 10% share. The JV acquired the plot of land encompassing some 300,000 m2 for around €50 mln in late 2017 and seeded it with an initial €60 mln of capital to bring forward the mixed-use project.

Luca Malighetti, managing director and head of Italy at Värde Partners said: 'SeiMilano is one of the largest urban regeneration projects which in the next few years will change Milan's skyline. We are thrilled to have closed the first phase of the project and we are confident that we will complete construction works within three years.'

Vitale acted as financial advisors to Värde Partners and Borio Mangiarotti.


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