DEGI reinvests office proceeds in EUR 204 mln factory outlet

German real estate manager DEGI has ploughed the proceeds of what has been described as Italy's largest single office transaction of 2006 into the acquisition of a factory outlet centre in northern Italy. DEGI purchased the 'Franciacorta Outlet Village' in Rodengo Saino near Brescia in northern Italy from a consortium comprising the development firms Gruppo Stilo and Craig Realty, as well as Italian financial investor Primavera.

The outlet centre, located 80 km from Milan and Verona on the A4 motorway, has 150 shops with a total of 21,700 m² of lettable area. The tenants include Levis, Nike, Benetton and Calvin Klein. DEGI made the acquisition on behalf of its Grundwert-fonds and the total investment volume is around EUR 204 mln.

DEGI said equity capital for the acquisition comes directly from the sale of three of the five properties at the Bodio Centre office complex in Milan to the Italian arm of ING Real Estate Investment Management (REIM) for EUR 152 mln.

Contracts for the office transaction were exchanged at the end of 2006, and the Bodio properties will be added to the portfolio of ING Insurance. 'The deal represents Italy's largest single office transaction for 2006', ING REIM said in a statement.

The three buildings have a total lettable area of 36,000 m². Florence Beccar, managing director of ING REIM in Italy, said the deal 'demonstrates our confidence in the Milan office market and takes our assets under management in Italy to over EUR 1 bn'. The total acquired by ING REIM on behalf of its European and international clients topped EUR 3 bn by the end of last year.

Property advisor Cushman & Wakefield represented ING REIM in the transaction, while Jones Lang LaSalle, DLA Piper and WTP Italia advised DEGI on both the disposal of the office properties and the acquisition of the outlet centre.