Hines Italia, a joint venture of US developer-investor Hines and the Italian Catella family, is to carry out a major redevelopment of Venice’s historic Lido site after taking over management of the area from peer Est Capital, currently in administration.

Hines Italia, a joint venture of US developer-investor Hines and the Italian Catella family, is to carry out a major redevelopment of Venice’s historic Lido site after taking over management of the area from peer Est Capital, currently in administration.

Hines Italia Sgr is joining forces with Italian bank Cassa Depositi e Prestiti, as well as with architects Chrisopher Choa (Aecom), Vittorio Gregotti and Claudio Rebeschini (R&S) to redevelop the area which was one of Europe’s most prestigious tourist destinations at the beginning of 1900 with its 12 kilometers of beaches in front of Venice.

The project encompasses two iconic hotels, the historic Excelsior and Des Bains, as well as a disused asset, formerly a hospital known as Ospedale al Mare, which is owned by state-controlled bank CDP, through its Fondo Investimenti per le Valorizzazioni fund.

‘This is a pilot tourist project. It is still at a very early stage but we estimate the redevelopment plan to require over €200 mln of fresh equity,’ Manfredi Catella, co-founder and CEO of Hines Italia Sgr, told PropertyEU in an interview.

The 50,000 m2 area is owned by Real Venice 1, a fund formerly managed by Est Capital before the company went into administration earlier this year. Hines, which is in the process of taking over management of the fund, is working with CDP to create a regeneration plan in an effort to attract new capital to the project and eventually transform the Lido into a worldwide tourist destination.

According to the Italian press, the companies are also in talks with US private equity group Starwood regarding a potential capital injection. Catella declined to comment on the market rumours, but admitted that international private equity groups are circling the Italian property market.

‘From the capital markets standpoint, there has been a fundamental change in Italy in the recent past, largely owing to a positive development on the political scene. Today, all the major private equity funds are looking to invest here, as well as some of the longer term players including sovereign wealth funds and insurance companies. The lack of institutional-quality product is, however, favoring more value-add investors,’ commented Catella.

The group has recently returned to the acquisition trail with the purchase of the Italian distribution centre of Amazon for its newly-launched logistics fund as well as with the purchase of the Aviva headquarters at Via Scarsellini for its Hines Italia Value Added Fund.

Dubbed LightBuilding, the 11-storey property is situated in the northeastern part of the city and provides around 17,000 m2 of space. Completed in 2010, it is currently 75% leased to a number of international companies including Aviva which uses it as its Italian headquarters.

Hines Italia is also advisor and asset manager on behalf of the Qatari sovereign wealth fund in the acquisition of the Credit Suisse headquarters in Milan from US developer-investor Tishman Speyer. The 12,300 m2 fully-let asset, which was put on the market through Cushman & Wakefield in early March, is rumoured to be changing hands for €105 mln in cash. It generates rents of around €6 mln a year.

'We have presented offers for acquisitions worth over €600 mln since the beginning of the year and we are currently in exclusivity on other assets,' commented Catella. The group currently has around €3 bn of assets under management in Italy.

At Porta Nuova, Hines’ flagship development in Milan, the company is on the verge of selecting the financial consortium which will refinance its Porta Nuova Garibaldi development fund.

A total of 17 major banking institutions worldwide tabled a bid, offering what Hines Italia described as 'some of the most competitive terms and conditions on the Italian market over the last five years'. In total, Hines Italia Sgr received over €3 bn of debt offers, meaning the €450 mln auction was seven times oversubscribed.

‘The financing cost for this development are now about half of what they used to be up to six months ago,’ Catella commented, adding that the company is looking for ‘a traditional financing package with no securitisation’. ‘We will pick a pool of banks even though we have had several offers from single banks willing to grant the entire financing.’

Porta Nuova is a mixed-use development in downtown Milan combining offices, retail and residential. It provides a total of 254,000 m2 of space across three sections, Varesine, Isola and Garibaldi, located near Milan's central station.

The Garibaldi section is home to the 30-storey Garibaldi Tower, officially the tallest building in Italy, designed by Cesar Pelli. The skyscraper provides over 60,000 m2 and is 100% leased to Unicredit Bank.

Qatar Holding, a unit of Qatar’s sovereign wealth fund, has the relative majority in the project after having acquired a 40% stake last year in a deal valuing the entire site at €2 bn.

Liquidity is gradually coming back to the Italian market as cash-rich institutional investors search for higher yields amid a low interest rate environment. Goldman Sachs International has just launched the €198.2m Moda 2014 Srl securitisation while Deutsche Bank is believed to be selling €355 mln of Italian commercial mortgage-backed securities in the financial group's first offering of notes backed by multiple loans in Europe since the financial crisis.