Apollo Real Estate has acquired a four-hectare industrial complex, formerly operated by manufacturer Pensotti, in the northern Italian city of Legnano from a Italian private investor. The US investor is teaming up with the Italian Palladium Group in a 80/20 joint venture to redevelop the site north of Milan into 300 residential units. The investment volume will come to EUR 100 mln, including about EUR 80 mln of development costs. Italian bank Intesa San Paolo is financing the deal.
Apollo Real Estate has acquired a four-hectare industrial complex, formerly operated by manufacturer Pensotti, in the northern Italian city of Legnano from a Italian private investor. The US investor is teaming up with the Italian Palladium Group in a 80/20 joint venture to redevelop the site north of Milan into 300 residential units. The investment volume will come to EUR 100 mln, including about EUR 80 mln of development costs. Italian bank Intesa San Paolo is financing the deal.
Apollo RE plans to redevelop the area over the next five to six years, with construction due to start by the end of 2008. Apollo RE is targeting families and young couples in Milan who are eager to move to an affordable neighbourhood. The apartments, distributed across six buildings, are expected to be sold at about EUR 3,000 per m2.
This is Apollo RE's second acquisition in Italy after the purchase in 2004 of the Ericsson headquarters in Rome. It is also the company's first venture with Palladium, a Milan-based property developer and the manager of the project.
Andrea Orlandi, director at Apollo Real Estate, said the US investor is already looking for more residential projects to carry out with Palladium in the north of the country. Orlandi added that the American company is focusing on residential property in the north of the country and on retail in the south. 'We are on the verge of buying two shopping centre developments in southern Italy', he said. He added that the company has already signed a preliminary agreement for the properties, and would not disclose other details on the transactions.
Apollo RE intends to strengthen its presence in the Italian property market where the effect of the credit squeeze appears to be less significant than in other European markets. Orlandi said this was mainly due to the restrained economic growth in Italy in recent years. 'Residential values in Italy haven't increased as much as they did in other countries, which means that the correction is now felt less significantly.'
