US privately-held developer-investor Hines has finalised the investment into a residential real estate portfolio in Milan on behalf of the Hines European Value Fund 2 (HEVF 2) marking the Fund’s first closing in Italy.
The portfolio, spanning 40,000 m2, is located in the South-East quadrant of Milan in Via Trivulzio 6/8, Via Roncaglia 8 and Via Villoresi 11/13/15, respectively. In keeping with the growing demographic expansion of the city in which some 300,000 new inhabitants are expected by 2035, Hines expects to launch approximately 300 residential units onto the market by 2023 to meet growing BTR product demand.
The assets, built in the 1970s and currently in disuse, will undergo extensive regeneration in keeping with the latest international standards for sustainability, with the aim of obtaining the highest LEED certification level. The properties are located in the heart of Milanese historical residential neighborhoods in the De Angeli, Via Washington and Navigli areas, and are less than 15 minutes from Piazza Duomo by public transport. In recent years, the area has seen major infrastructure improvements alongside the development of a dense network of public transport connections, including the new M4 underground line which will be operational in 2022.
‘From an investment perspective, it has been relatively hard for many cross-border investors to gain market exposure to the residential sector in Milan, so achieving this rare, off-market opportunity and quality in one transaction is a great success for the Fund,’ said Paul White, senior managing director and fund manager HEVF 2, at Hines. ‘Our advantage of a ‘boots on the ground’ team in Italy with in-depth knowledge of the local market has enabled us to make thorough on-site diligence of the assets and is yet another example of this advantage we have enjoyed repeatedly across Europe since Q1 2020. It has meant the pace of our deal origination and execution has not suffered.’
The HEVF Series invests across all the major real estate sectors. HEVF 1 focused on core-plus and value add office, whereas HEVF 2 is most active in BTR and logistics.
HEVF 2 capital raising is concluding and in parallel, with this investment, the Fund will be approximately 50% allocated to seven investments across Germany, Italy, Spain and the UK with further investments in France, Italy and the Netherlands expected to conclude in the coming months which, upon completion, would mean the Fund would be almost 70% allocated.
This acquisition marks Hines’ latest investment in the living sector in Milan, following a string of recent deals, including MilanoSesto, Nodo Bovisa, Borgospesso 15, Ex Trotto, Torre Valesca, Giovenale 15 and Ripamonti 35. Hines ongoing strategy is to develop over 5,000 new BTR units in Italy by 2025.
‘We continue to push ahead with the growth of our living platform in Milan. We believe in the sustainable development of this constantly-evolving city, which increasingly requires new rental options paired with services designed for wellbeing to meet ever increasing demand,’ said Mario Abbadessa, senior managing director and country head of Hines Italy.
