Generali widens focus to high-street retail

The fund management arm of Italian insurance giant Generali is looking at a number of high-street properties for potential acquisition as a hedge against inflation, according to Giovanni Paviera, CEO of Generali Immobiliare Italia Sgr. The move represents a major change in the company's investment strategy which has traditionally focused on prime offices.

'We are considering a number of high-street acquisitions in key Italian markets because the sector adjusts quicker for inflation as rents are linked to indices,' Paviera told PropertyEU in an interview. 'We also continue to look at prime offices in Rome and Milan, which is historically our preferred investment segment and one of the most liquid markets in Italy.'

Although the company currently owns some EUR 1 bn of ground-floor retail properties acquired along with office buildings, the purchase would represent the first retail-dedicated deal carried out by Generali. 'We have always been in this sector because our office properties often have a retail component, but we are now looking at this segment independently.'

Generali Immobiliare Italia Sgr plans to invest some EUR 200 mln in Italian real estate this year, he added.

Last year, the company acquired an office building leased to the Ministry of Health from Bodio Center, a subsidiary of Aberdeen Immobilien for around EUR 120 mln. The transaction was Italy's largest office single-asset deal of 2010. Located in the Eur financial district of Rome, the fully let property was owned by Aberdeen's Degi Europa open-ended property fund currently in liquidation. It was bought in 2007 and offers nearly 35,000 m² of space as well as 303 parking spaces.