REAL ESTATE - Pension funds will be offered 10% of a fund set up this month to invest in Sicilian public buildings.
Fondo Immobiliare Pubblico Regione Siciliana (FIPRS) – a joint venture between the region of Sicily, Deutsche Bank real estate subssidiary RREEF, and Pirelli – launched with 34 properties valued collectively at €263m.
The region of Sicily will hold 35% of the fund, with 33% held by RREEF Global Opportunities Fund and 22% by Pirelli, whose fund management arm already manages the region’s public property portfolio.
Sicily will contribute further properties to the fund from its "enormous" portfolio. Most of those already contributed are located in Catania and regional capital Palermo. Annual rents on the properties amount to €21m, representing a yield of 7.95%.
RREEF spokeswoman Louise Pancott said the portfolio was attractive because it contains buildings from "a variety of asset classes and uses".
The fund’s value, less debt, is €105m. Debt of €158m assumed by the fund has been secured against the properties.
Although this is not the first private fund of its type, Pancott said it had "certain unique characteristics", including the 35% regional holding and its active involvement in the fund’s governance "essentially making this more like a true partnership".
Pirelli will use the fund to grab more of the market of public institutions with property portfolios worth more than €400bn. Italy’s public sector is one of Europe’s largest property owners and Italian regions will likely push forward market developments, including sale-and-leaseback agreements, said Pancott.