ITALY - Segro, the serviced office firm, has acquired a Milan business park for €84.5m from fund manager Europa Capital Partners - a beachhead in a market segment known for the difficulty of cross-border investment.

‘Serviced office' has emerged as a niche real estate sub-segment in recent years, with investors such as the €221m Dutch civil service pension fund ABP and BriTel, the British Telecoms Trustees' pension fund managed by Hermes. However, most firms in the industry focus on their domestic market, largely because of the difficulty of managing lease regulations without sufficient existing international business.

Segro, which is owned by UK property group Slough Estates, established a three-site foothold in Italy at the end of last year with its acquisition of a pan-European portfolio from UK paper firm Antalis so the firm now plans to open an office in Milan.

However, Segro spokesman Colin Browne said Italy was just one market among several European targets.

"The focus isn't Italy-specific," he said. "There are opportunities across most of Europe."

The firm has investment euros to spend after selling its US business last year. "One does these things as the opportunities arise," said Browne.

Its strategy is to develop sites along key infrastructure routes, the latest acquisition matching this strategy as it neighbours a bypass.

In contrast to Segro's strategy, much of the UK serviced office industry focuses on marginal and sub-prime properties earmarked for eventual refurbishment. Setting up a serviced office structure enables investors to pay for the refurbishment that will make it commercially credible.