alternative Assets News: Spanish Real Estate Intelligence

16 February, Il Sole 24 Ore Hines targeted San Siro. The company is ready to launch a requalification project potentially worth 400 million euro. Nowadays, big investors operating on the Italian real estate market are increasingly focused on urban requalification and development projects. This has concerned only selected cities so far, with Milan leading the chart. The city is experiencing the relaunch of the Italian real estate sector. Prices for residential properties have been rising since 2013. Milan is changing quickly. After having welcomed the arrival of big projects such as CityLife and Porta Nuova, the city sees the start of new requalification projects while it’s waiting for the final approval of future ones. In Milanosesto, Hines and Prelios are competing for managing and coordinating the real estate development covering 1.4 million Sq m. In Santa Giulia, Risanamento and the Australian LendLease are waiting for the green light from the City of Milan to start building houses in the site. Finally, the Arena might host the winter Olympics if Milan with Cortina will be the winners of the bid. There are many other projects in the pipeline — for instance, the acquisition by the American Hines of the Snai area in San Siro. The site includes the former racecourses, covering a 45 thousand Sq m area located near the stadium. According to the rumours, there is already an agreement, and the transfer of ownership from Snaitech to Hines might be completed in the first half of 2019. The former racecourses will accommodate auxiliary services to the stadium, from shops to a museum, football clubs and restaurants, along with residences and senior living in the southern part close to the metro station. The Inter and Milan football clubs will have to decide whether to tear down the existing stadium and build a new one in the current place of the parking lot or whether to renovate the existing one. The clubs both sent letters to the City administration demanding more space in the area. Hines and the City of Milan are still deciding the intended use of the site, which will determine its value. The whole operation might be worth 300-400 million. Requalification projects concern 3 million Sq m in total in Milan, also considering the former rail yards, in a five-year horizon. Meanwhile, large investors continue with their shopping. Ubs has recently acquired La Forgiatura, an integrated campus for a surface of 30 thousand Sq m which will undergo a requalification project with a focus on energy efficiency located the Certosa area. The site has seen the recovery of approximately 15 thousand Sq m, in addition to the 10 thousand Sq m dedicated to new construction. The Traversi garage, right behind San Babila, has changed ownership, following the sale by a fund of Bnp Paribas Real Estate to Invesco for approximately 100 million. The property has been vacant for over a decade, having changed owner several times, from Aedes to Risanamento, and finally Banco Popolare. Gva Redilco has been appointed for marketing its spaces, starting from the temporary stores. Coima and Ardian are competing for obtaining the former Boeringer headquarter near Porta Romana. The project concerning the homonym rail yard will radically change the area. Its requalification had already started with the arrival of the Prada Foundation and Symbiosis. Finally, there is a great expectation for the building property of the City of Milan in Via Pirelli 39 overlooking the Melchiorre Gioia bridge. The auction is scheduled for the 29th of March. The starting price is 87.5 million plus 18 million for the annexed parking lot. All the primary players of the sector will take part to get the last piece of Porta Nuova left on the market. Source: Il Sole 24 Ore Translator: Cristina Ambrosi

15 February, Mark Up In 2019 hotels will be one of the most interesting asset classes concerning the capacity to attract investments, according to the Investor Intentions report by Cbre. In 2018, hotels in Italy drew total investments for 1.321 billion net, continuing the trend of 2017, and they’re expected to grow further this year reaching approximately 2 billion euro. With 277, 000 bookings in a year, 33,000 hotels and 1.1 million rooms, Italy is the fourth market after the United States, France and Spain. International investors, generally representing the predominant quota of real estate investments in Italy, were 65% of the total investments in 2018, having decreased from the 76% recorded in 2017. Investors are particularly attracted by luxury hotels in the main tourist destinations, especially Milan, Rome, Florence and Venice. Several international companies have recently made their debut on the Italian market. In Milan, the Singaporean First Sponsor Group acquired Grand Hotel Puccini. In 2018, Swiss Life completed its first acquisition in Italy with Radisson Blu, always in Milan, and Novotel Malpensa. For 2019, the main challenges of real estate acquisitions in Italy will still be asset availability (21% in 2019, aligned with 2017 and slightly decreasing from 2018 with 25%), cost of properties (15% in 2019, increasing from 2017 but aligned with 2018 which reported 16%), political instability (14% in 2019, decreasing in comparison with 2017 which recorded 15% but having sharply increased from 2018 with 8%). A stable year “Unless destabilising geopolitical events in 2019, we expect a steady year or even better than 2018”, commented Cbre Italy Ceo Alessandro Mazzanti. It will be, however, well below the results reported in 2017. The key sectors will be logistics and hotels. Retail will not register a significant growth, and it will require a careful selection. It will be necessary, in fact, to hunt for opportunities as prices have decreased. In 2018, the segment, in continuity with the 2017 trend, performed better than other European markets where the contraction was more dramatic since the stock was bigger. We’re currently in the middle of an evolution: bigger assets are benefitting from the rise of e-commerce, while shopping centres can be a good place where to experiment with different formats”. Retail and logistics: the most resilient segments Retail is the real estate asset class that reacted the best to the 2018 market contraction, with investments equal to 2.243 billion euro, decreasing by 6% from 2017. In 2019, we might see the completion of some critical operations concerning factory outlets, as the segment risks to be severely impacted by the law on Sunday closures. 18.43% of the people surveyed see logistic as the most interesting asset class of commercial real estate in terms of investments in the pipeline for 2019. Despite the segment has slightly reduced from 2017, in 2018 logistics doubled its transacted volumes, net of the Logicor transaction. Investments have gone from 5% as recorded ten years ago to 10% in the current economic cycle. The growth of e-commerce has positively influenced the performance of the entire sector, and it’s expected to grow further in 2019. Student housing was one of the most dynamic sectors in 2018 in Italy. According to 32% of the people surveyed by Cbre, it will be the residential segment with the biggest potential, followed by senior housing (25.2%) and luxury houses (15%). 68.8% of the interviewed believes that student housing might become the leading asset class of Italian real estate. For what concerns offices, the trends regarding serviced offices and co-working will consolidate in 2019, after the entrance in 2018 of new players. Requalification will be crucial for Milan and Rome. Milan has started with a rush, with the launch of some requalification and expansion projects already at the beginning of 2019. Meanwhile, Rome has a number of projects in the pipeline, and the demand is in excellent shape. The healthcare sector has gone from 6% to 8%. The low birth rate combined with the longer life expectancy has brought to the progressive ageing of the population. In 2017, Italy had the highest old-age dependency ratio in Europe (34.8%) according to Eurostat, resulting in one of the most attractive countries for investors in the healthcare sector. 14% of the interviewed said to be interested in the NPL sector, placing bad loans second in order of interest, followed by offices and student housing with equal merits. Source: Mark Up Translator: Cristina Ambrosi