M&G Real Estate has returned to Italy after a 10-year hiatus, buying a high street retail development in Milan.
The real estate fund management arm of M&G Investments said it bought the holding company for the 3,745sqm asset from its developers, PRIA.
The asset, M&G said, will become part of its core European property strategy upon completion.
The deal comes at a time of heightened interest in Italian commercial real estate.
Two leases for the asset have been signed by fashion retailer Teddy, which will use the property as its headquarters.
M&G Real Estate deputy fund manager Simon Ellis said the tenant’s “strong credit rating” and the signing of a long lease would provide a “good, defensive income”.
“The excellent retail location aligns with our strategy of increasing our exposure to the retail sector and further diversifying our country exposure,” said Ellis, appointed deputy fund manager of the firm’s €864m core European property strategy earlier this year.
Pietro Croce, partner and board member at PRIA, said the firm had sold the asset for a club of 15 family offices.
Croce said there was “renewed interest” from international players on both the “leasing side and investment side”.
“The disposal perfectly matches our strategy of investing in high-quality Italian assets that meet the expectations of international institutional investors such as M&G Real Estate.”
The asset, at the junction of Via Torino and Via Della Palla, is due to open this quarter.