Blackstone did it again, this time, selling the jewel from a Milan portfolio for more than the €1.1 bn it paid for all 14 assets three years ago.
The US giant's European head, James Seppala, said its sale on behalf of a Blackstone Property Partners Europe fund of Via Monte Napoleone 8 was 'an excellent outcome for our investors and demonstrates exceptional investor demand for high quality real estate in the strongest markets'.
French group Kering paid €1.3 bn for the 11,800 m2, 18th century building in the heart of Italy's most exclusive shopping area, largely to secure the 5,000 m2 store in the block occupied by its Saint Laurent brand. The company also owns Gucci and Bottega Veneta, amongst others.
Kering's splash follows deals by other luxury fashion houses aimed at securing flagships in global cities. LVMH paid Brookfield circa €1 bn last December for 150 Champs Élysées in Paris.
That Paris transaction was the largest in Europe last year, according to MSCI, underscoring how such deals stand out as exceptional while anything above €100-€150m continues to be extremely scarce. Those that have closed have been more likely to be luxury retail or hotels than offices.
Two buyers of modest-size offices, however, both found value in the market this week: Feldberg Capital picked up a Covent Garden block in London for £75 mln which vendor BlackRock had previously put on the market back in 2016 for £100 mln; and MEAG snapped up the 11,000 m2 rejuvenated Arte Fabrik property in Munich Schwabing for about €60 mln.
Katrin Hupfauer, head of real estate transactions, MEAG, said: ‘Even as a long-term portfolio holder, we were reluctant to acquire new properties in Germany for a long time due to the very high prices, but in the current market environment we are finding increasingly attractive opportunities again, regardless of the type of use.'
More large hotel portfolios may come to the market soon if advisers hired by CitizenM's investors and Goldman Sachs, owner of B&B Hotels, decide to push the button on sales.
It was an active week for banks, with 11 financing a variety of deals in clubs and syndicates; ING alone was involved in three large clubs lending on property for borrowers in the Netherlands, Romania and Italy.
Savills Investment Management announced the first close of an open-ended affordable residential fund with five cornerstone investors including Samsung Life which has the potential to be big.
