Real estate investment firm Hines has finalized 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 company said.
This investment represents an opportunity for HEVF 2 to create market-leading Build-to-Rent (BTR) with superior amenity provision and placemaking, Hines said in a statement.
Milan’s residential sector is expected to benefit from strong market fundamentals of rising demand, driven by accelerated trends in the demographic shift toward renting and creating world-class assets for long-term institutional investors.
The portfolio, spanning 40,000 square meters, 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,” says Paul White, Senior Managing Director and Fund Manager HEVF 2, at Hines.
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 by transforming urban areas or individual buildings that have been in a state of disuse into innovative residential solutions aimed at professionals, couples and young families.
This model is designed to meet modern living needs including flexibility of space, affordable rents, fantastic amenity provision, spaces dedicated to coworking, gyms and nurseries on site, communal areas to encourage socializing and community interaction, and green areas including external and internal gardens.
“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,” confirms Mario Abbadessa, Senior Managing Director and Country Head of Hines Italy.