Barings has entered the Italian build-to-rent (BTR) market with the acquisition of a residential development opportunity in Milan.
The manager said its Barings Real Estate European Value-Add Fund II fund (BREEVA II) has acquired the asset in the Bovisa district, through an Italian real estate fund managed by Savills IM SGR for an undisclosed sum.
Barings said it will redevelop the current disused office and industrial complex into a 9,500sqm BTR scheme of 170 units, with completion expected during 2024.
Gunther Deutsch, managing director, Germany, and head of European real estate transactions at Barings, said: “We have already invested in the BTR sector in the Nordics and the UK, now in Italy too, and soon we will expand that sector investment to Germany.”
Deutsch said the plan is to invest close to €1bn across the different alternatives like build-to-rent/build-to-sell, student housing and co-living.
“As we face strong pricing in this sector, we are keen to partner with developers early in the process and like to cover the risk spectrum, from value-add to core, in our preferred markets of the Nordics, the Netherlands, Germany, Italy, France, Spain and the UK,” Deutsch said.
Marco Corti, managing director and head of Italy real estate at Barings, said the acquisition in Milan, which was done off-market, reflects the strength of Barings’ local knowledge.
“The Grade A build-to-rent development, which will target excellent ESG credentials and benefit from the regeneration of the wider neighbourhood, will make it a highly desirable place to live.
“With low unemployment and one of the highest housing supply-demand imbalances in Europe, investing in quality, much-needed new homes in Milan is very attractive and makes this an even more compelling addition to BREEVA II’s portfolio in Italy.”
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