10 May, Il Sole 24 Ore
An investment boutique with assets under management for 6.5 billion euro and strictly focused on retail. Bmo Real Estate Partners is a subsidiary of Bank of Montreal and is present in Europe with a team of 110 people in the UK, Ireland, Germany and France.
The group is also targeting Italy. “Bmo Real Estate Partners started investing in Italy a couple of years ago – says Ian Kelley, Bmo Fund Director for Europe – Today, we have portfolio 325 million euro worth, divided between properties in Rome, Milan and Verona”.
The high-street segment is one of the favourites for international investments since it grants fixed returns, even though these are gradually reducing. According to the international advisors’ latest reports, the yields for prime locations in Milan and Rome have decreased by 3.5%.
Bmp has been focusing so far on the prime locations. In 2016 it acquired a property in Rome which accommodates the luxury shopping centre Coin Excelsior in Via Cola Di Rienzo with an operation valued at 86 million euro. The seller was a team composed of famous names of the sector led by the Argentinian entrepreneur Edoardo Safdie. Coin has a seven-year contract, and it’s likely that it will be renewed given the location. The property occupies a surface of 8 thousand Sq m.
In spring 2018 the group acquired other two properties for a value of 150 million euro. The first property – 1,500 Sq m entirely leased to Brioni – is located in Via Gesù in Milan and was sold by Kering Group, while the second is in Rome in Via Condotti and is leased to the brand Lvmh.
“We’re still looking for new properties to acquire in Italy – says Ian Kelley – especially in Milan and Rome, but also in other locations such as Venice, Verona and the centre of Turin”.
The company manages two funds in the retail sector, the first was launched in October 2015, it’s specialised in the high-street retail and luxury segments and is entirely invested at present; whereas the second was launched last December and is also focused on high street and diversified according to segment premium (for instance, properties leased to brands such as Lacoste and Sephora) and luxury.
The size of the first fund is 600 million euro. The portfolio includes Coin Excelsior in Rome, while Coin Verona is comprised in the second portfolio. The building accommodating Coin Excelsior in Milan is for sale at the moment by the current owner Beni Stabili. “We’re considering the acquisition”, says Kelley. However, some experts argue that the location of the property might not have favoured product sales.
Among the assets of Bmo, there are some of the main European buildings such as a property in Paseo De Gracia in Barcelona, a building on Rue de la Paix in Paris, the property at number 82 of King Street in Manchester and one in Great Pulteney Street in London.
“Today, there is a great competition among investors on the best locations – he continues- For instance, the high-street sector in London hasn’t been impacted much by Brexit since it addresses mostly tourists who are coming to the city anyway. For this reason, we’ve seen some important transactions in locations like Oxford Street and New Bond Street. Our objective is, however, to reduce the exposure in London”.
E-commerce doesn’t scare Kelley, even though it has an impact on retail. For example, the luxury segment requires service and expertise levels that only a luxury store can offer.
Source: Il Sole 24 Ore
Translator: Cristina Ambrosi