Germany's Union buys 90% of Italian mall

German asset manager Union Investment has acquired a 90% stake in Le Terrazze shopping centre in the northern Italian harbour city of La Spezia from a joint venture of Sonae Sierra and ING Real Estate Development.

The parties agreed not to disclose details of the purchase price. However, the mall involved an investment cost of €150 mln for Sonae Sierra and ING Real Estate Development.

The asset is earmarked for Union Investment's UniInstitutional European Real Estate fund.

Sonae Sierra will continue to hold a 10% share in the mall while retaining the asset management.

Le Terrazze was developed by a Sonae Sierra-ING RED joint venture and inaugurated in 2012. The scheme offers 38,455 m2 of gross space and about 2,000 parking spaces. It is 99.5% let and attracted over six million visitors in 2013 alone.

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'This agreement reflects the high quality of the asset as well as our long term business strategy of recycling capital for future growth while keeping an ownership stake of the centre and continuing to be responsible for its management,' said Sonae Sierra's CEO Fernando Oliveira.

He added: 'We will continue to look for growth opportunities in Italy, by actively looking for new development opportunities and acquisitions of existing shopping centres.'

According to Michele Monterosso, director ING Commercial Banking, Real Estate Finance and RE&O in Italy, the sale 'reflects the group's business strategy which aims at a smooth wind-down of the remaining ING RE equity positions in all geographies'.

'The purchase of the majority shares of the young, but already successful Le Terrazze is a very good opportunity to show our engagement in the attractive northern Italian retail market,' commented Christoph Schumacher, member of the management board of Union Investment Institutional Property.

Union was advised by agent JLL on the deal. Commenting on the transaction, Davide Dalmiglio, head of Capital Markets at JLL Italia said the operation is an indication of the return of large European institutional investors to the Italian property market.

Earlier this month, German insurer Allianz announced its comeback to Italy with the purchase of a shopping centre in Genoa in partnership with NN, the insurance arm of the Dutch bank-insurer group ING Group. NN listed on Euronext Amsterdam on 2 July and will become totally independent of ING Bank before end-2016.