China’s Fosun enters mainland Europe with €345m Milan trophy asset buy

Chinese conglomerate Fosun has inked the acquisition of Unicredit's former headquarters in Milan, outbidding a joint venture of asset manager Hines and the Abu Dhabi sovereign wealth fund ADIA.

Shanghai’s Fosun is paying €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.

The deal - the largest trophy asset to change hands in Italy in years - is believed to represent Fosun's first foray into the European property market.

CBRE handled the entire sale process.

The investment conglomerate controlled by Chinese billionaire Guo Guangchang has recently made acquisitions in New York, Tokyo and Sydney. It is also believed to have bid for Potsdamer Platz in Berlin which was recently put on the market by SEB Asset Management for €1.5 bn.

In Milan, Fosun has been vying with a partnership of Hines and ADIA for the historic building, which is located at 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 is 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 50,000 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.