Italian investor and developer Coima, and affordable housing specialist Redo, have agreed a deal to take over the development of the MilanoSesto regeneration project in Milan, Italy from Hines and Prelios.
The vast urban regeneration project in the north-east of Milan has a development value of circa €3.5 bn with a total area of more than 1 million m2.
The agreements signed by Coima and Redo see the two partners take 100% ownership of MilanoSesto SpA, the company that owns the majority of the regeneration site, from Hines Iron MilanoSesto Associates.
A further deal has also been agreed that sees the two partners acquire 27,000 m2 of land, part of a site called Unione Zero, which is designated for social housing from Hines and Cale Street. Altogether this means Coima and Redo have ownership of 90% of the regeneration development.
Manfredi Catella, founder and CEO of Coima, said: 'MilanoSesto is one of the most important urban regeneration projects in Europe. Coima's commitment alongside Redo, a leading company focusing on regeneration with a high social impact, and the consolidated partnership with Intesa Sanpaolo, a leading European banking group at the forefront of sustainable infrastructure projects, provides a unique blend of skills to support Milan and Italy's growth.
'With a deep sense of responsibility, together with our partners, we will take forward this strategically important project with the aim of ensuring it becomes an international benchmark for socially and environmentally sustainable urban redevelopment, attracting national and international investors with strong ESG commitments, creating a thriving place fit for a zero-carbon future.'
Converting €900m of debt
As part of the agreements, a series of complex financial operations have been concluded with Intesa Sanpaolo, the project’s main financier, and other lenders, including Unicredit, Banco BPM and IFIS, involving the conversion of around €900 mln of debt into equity. This ensures the recapitalisation of the project, contributing to the recovery and further revitalisation of an area that is strategically important to the Milanese metropolitan area, Lombardy and Italy.
The MilanoSesto site is spread across two distinct areas, the largest of which covers approximately 840,000 m2 and is owned by MilanoSesto.
This area, which will now be brought forward by Coima and Redo, mainly comprise residential development, including subsidised and social housing, as well as the City of Health and Research, a centre of clinical and scientific excellence which belongs to the Lombardy Region, and a park of approximately 45 hectares.
The 155,000 m2 Unione Zero area includes 27,000 m2 for a social housing project, now taken over by Coima and Redo. This will consist of approximately 350 new apartments for employees of the City of Health and Research and its related facilities.
The residences will be developed through a newly established fund, managed by Redo and subscribed by Re-City, Redo’s City Regeneration Fund, and the Coima Housing Fund. The latter was established by Coima to invest in sustainable housing and is backed by Intesa Sanpaolo and a range of leading Italian institutional investors.
The remaining part of the Unione Zero site, approximately 128,000 m2, will continue to be owned by the "Unione Zero" fund, managed by Prelios, with investment from Cale Street and Hines. This area will retain its current uses under the existing plans, which includes offices, student housing, hotel and open-market housing.
