Spazio Investment buys Milan office

London-listed Spazio Investment has acquired a new office building in Milan from Italian developer Pasini Group for EUR 27.5mln. The acquisition was made through Spazio's Italian fund Spazio Industriale. Located in Sesto San Giovanni, near Milan, the new 13,100 m² building has been developed over the last 18 months within Pasini's light industrial complex, of which Spazio already has full ownership. The office property will generate approximately EUR 2.3mln in rental income, representing a gross entry yield of 8.3%.

Spazio said on Thursday that it will lease circa 9,600 m² of the building to Alstom Power Italia for an annual rent of EUR 1.6mln. The lease will commence on 1 May and will last for a period of seven years, with a renewable option for another six years. For the remaining 3,500 m2, Pasini Group will guarantee an annual rental income of approximately EUR 660,000 for a maximum period of six years.

The Pasini industrial complex consists of three industrial properties covering nearly 29,000 m² of surface area. The site is currently being transformed by the Pasini Group into a mixed-use residential, office and retail complex. In the event the master plan is approved by the municipality of Sesto San Giovanni ahead of schedule (before June 2009), Spazio has agreed to pay an additional EUR 3mln to Pasini Group for the office.

John Duggan, chairman of Spazio Investment, said, 'Completion of this latest acquisition further cements our goal to invest up to EUR 200mln in acquisitions this year. So far in 2008 we have completed almost EUR 60mln of acquisitions.'