Hines has teamed up with an investment firm backed by Kuwait’s sovereign wealth fund to invest €500m to develop part of an urban regeneration project in Italy.

Hines has formed the partnership with Cale Street to buy and develop Unione Zero, the first phase of the MilanoSesto redevelopment project in the north-east quadrant of Milan’s metropolitan area.

The €500m investment being made by the firms has been committed to a fund managed by Prelios.

The MilanoSesto project, backed by banking group Intesa Sanpaolo, is expected to transform a 1.5m sqm area into modern public spaces. The project will include alternative residential product offering affordable housing as well as services such as child care and co-working areas.

Subject to planning permission, the first phase Unione Zero development is set to begin in 2021.

Mario Abbadessa, senior MD and country head of Hines Italy, said: “We are very proud to have set in motion a project that will lead to the redevelopment of a very important area of the greater Milan with a strong industrial tradition, which has been inactive for more than 20 years.

“This region, one of Europe’s most dynamic and most promising, will see the launch of a sustainable and innovative residential development featuring affordable rents, links to the city centre and modern services for students, families, and the more mature. This is another significant achievement for our Italian office and is the result of teamwork.”

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