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Blackstone to buy 35% of Kryalos
05 December, Il Sole 24 Ore
The financial investment proofs the great interest of the American Blackstone for the Italian long-term real estate market.
The American group entered with a 35% share into the capital of Kryalos Investments, the holding of Kryalos Sgr, after having acquired real estate assets in Italy for a total value of approximately two billion euro. The direct investment is exclusively for financial purposes, and Blackstone will not be represented in the Kryalos Board of Director, the Board of Auditors and in the management. As a result, the Kryalos management structure will not change after the operation, and Andrea Amadesi will still be the president of the Board and Paolo Bottelli the Ceo.
The operation is still pending the green light from Banca d’Italia. For Kryalos, the objective of the operation is to expand and to institutionalise the company which was born five years ago from the acquisition by Paolo Bottelli of Henderson Sgr. For Blackstone, it’s an opportunity to strengthen its investment strategy on the Italian market. The American company has bought in the past few years offices in Milan such as the former Poste office in Piazza Cordusio and in Via Santa Margherita – this latter is meant to be leased to Goldman Sachs and Huawei -, as well as the outlets of the portfolio named Land of Fashion which is currently on sale, logistics assets and recently acquired properties in Rome. In September, Blackstone acquired through the Kryalos fund Thesaurus Palazzo Sturzo in Rome, which accommodated from 1958 to 1992 the Democrazia Cristina and then Partito Popolare political parties. After having bet on Milan years ago when Italy was no longer in the radar of investors, with the investments in Rome, the company is pursuing investing in core as well as value added assets and, perhaps, also real estate development in the future.
Since its constitution, Kryalos through its consistent growth achieved managed assets for five billion euro through 34 real estate funds, which are mainly subscribed by Blackstone, York and Kingstreet. The total transactions in 2018 are worth about 1.2 billion euro including deals closed on behalf of ten different investors.
The transaction is particularly significant since Blackstone is currently dealing with a controversy concerning its first operation in Italy in 2013. The operation regarded the acquisition of the offices of the newspaper Corriere della Sera in Via Solferino, consisting of three buildings in the area between Solferino and San Marco in Milan’s neighbourhood of Brera. Blackstone acquired the assets for 120 million euro. Last summer, the group was about to sell the properties to the German Allianz for double the price, but the operation came to a halt due to Urban Cairo, the new owner of Corriere della Sera. On 9th November, he requested to the Court of Milan an arbitration to ascertain the invalidity of the 2013 contract. Blackstone sued Rcs in the Court of New York. The fight is not over yet.
Source: Il Sole 24 Ore
Translator: Cristina Ambrosi