Chinese conglomerate Fosun has closed the purchase of Unicredit's former headquarters in Milan, its debut acquisition in the Italian real estate market.

Chinese conglomerate Fosun has closed the purchase of Unicredit's former headquarters in Milan, its debut acquisition in the Italian real estate market.

Shanghai’s Fosun paid €345 mln for the historic building, which is known as Palazzo Broggi and was formerly used by Unicredit as its headquarters before the lender relocated to a new tower in Porta Nuova.

PropertyEU broke news of the deal in April, when it reported that Fosun had agreed to buy the asset in the largest real estate transaction in Italy in years. The deal is also believed to be the first direct acquisition of Italian commercial property by any Chinese investor.

Fosun had been vying with a partnership of Hines and Adia for the historic building, which is located on Milan’s central Piazza Cordusio. Hines and Adia offered €331 mln for Palazzo Broggi, while another joint venture, between Italy's Prelios and UK investor London & Regional Properties, tabled a €300 mln offer.

Palazzo Broggi was put up for sale through CBRE in July 2014 for a price of €400 mln. The landmark office building was owned by IdeaFimit’s Fondo Omicron Plus, which bought it in 2009 as part of a larger acquisition of €800 mln of assets from lender Unicredit.

The complex dates back to the early 1900s and provides around 45,000 m2 of office space in central Milan. It is fully let to Unicredit on a 12-year lease although only 30% of the space is actually used by the bank.

Fosun plans to redevelop the property in one of the largest urban redevelopment projects in Continental Europe and the new concept is expected to host retail, offices, luxury hotels and serviced apartments.

'This is a great example of the strengthening Italian market attracting global capital and the increasing push by Chinese investors into new markets,' said Nick Hendy, senior director of EMEA capital markets at CBRE.

Outbound Chinese capital reached over $10 bn in 2014, the first time annual flows have exceeded that threshold, according to research from CBRE.

Although London remains the favoured destination – accounting for 52% of total China-sourced commercial real estate investment flows to Europe in 2014, its share of European investment has dropped from 80% in 2013, signalling a move by Chinese investors into new European markets.