Estcapital appointed to manage Venice's property fund

The management arm of Italy's Estcapital has won an auction organised by the municipality of Venice for the management of some of the city's property assets. A partnership of SGR Estcapital and Unicredit Corporate Banking has emerged ahead of 11 bidders including Pirelli Real Estate for the creation and the running of Fondo Immobiliare Città di Venezia, which will take control of 18 commercial properties in Venice.

The assets, consisting of buildings and plots of land, were previously used by the municipality and will now be vacated and converted to commercial use with financing provided by Unicredit. The value of the assets is currently estimated at some EUR 82 mln, according to the latest appraisal made by real estate advisor K2 Real Estate.

As part of the agreement between Estcapital and the city, Fondo Immobiliare Città di Venezia will acquire a 50% stake in the portfolio, bringing some EUR 41 mln into the city's coffers. The equity will be used by the municipality to finance regeneration projects in Venice. The vehicle will finance the acquisition of the remaining 50% interest with the issue of fund units, whose value will be determined after conversion and redevelopment of the properties and is expected to exceed a total of EUR 82 mln.

The fund is the third to be set up by Italian municipalities following the launch of similar property funds by the cities of Milan and Turin. Estcapital was advised by Palladio Corporate Finance and law firm Pirola Pennuto Zei e Associati through its partner Gianluca Saccoccia.