PRESS RELEASES

Former Italian Post Office HQ in Milan Acquired by Joint Venture; Hines to Manage Redevelopment

01/12/2007

(MILAN) - Italian real-estate fund MHREC (Monte dei Paschi Hines Real Estate Crescita), which is managed by Monte Paschi Asset Management SGR with advisory services from Hines, has completed the acquisition of the former Italian Post Office headquarters on Via Ferrante Aporti in Milan.  The building was purchased from EGI SpA, the real-estate arm of Poste Italiane, the Italian Post Office.

A 50/50 joint venture company, Business Port S.r.L., was simultaneously formed between MHREC and TIAA-CREF to own, manage and finance the 35,000-square-meter refurbishment project.

Hines will manage the redevelopment of the project, which will restore the building to its former grandeur and contribute to the revitalization of the Milan Central Station neighborhood.  Demolition work will commence in next month, and project completion is expected in late 2009.

Project cost will total approximately €100 million for the acquisition and refurbishment of the property.  The deal was financed with leverage of approximately 60 percent, exclusive of VAT, by a pool of banks, including Centrobanca (40 percent), Banca Popolare di Milano (30 percent), and Monte Paschi Banca per l’Impresa (30 percent).

Notable in terms of its architectural and historical value, the building was designed by Ulisse Stacchini, who also designed Milan’s Central Station, and constructed in the 1930s. It overlooks Piazza Luigi di Savoia, an area that has recently been improved by the City Council and Grandi Stazioni as part of the Central Station revitalization program.

ARCHITECT SELECTED

In July 2006 Business Port S.r.L. launched an architectural competition, inviting Antonio Citterio, Mario Cucinella, Umberto Capelli, David Chipperfield and Progetto CMR to submit designs.

The winning plan, submitted by Antonio Citterio, calls for office and retail components, with particular attention to the public and pedestrian areas around the building. The plan is currently being finalized and will be presented again in the spring.

Thomas C. Garbutt, group managing director and head of TIAA-CREF Global Real Estate, said “Via Ferrante Aporti is an exciting project that involves renovating a building with historical significance.  Via Ferrante Aporti is our second real estate investment in Italy. We are delighted to enter into a new partnership with MHREC, and to continue our association with Hines. TIAA-CREF Global Real Estate has an active European investment program and is committed to expand our presence in the Italian market. 

Manfredi Catella, chief executive of Hines’ Italian office said, “The renovation of this palazzo, financed by leading Italian and international institutional investors, is an important new commitment destined to advance this strategic area of Milan. The refurbished building will be restored to its former splendour and will become a new space full of life and creativity.”

THE MHREC FUND

MHREC is a property fund created by the partnership of Monte Paschi Asset Management SGR and Hines.  MHREC Fund is one of the first Italian institutional investor funds devoted to redevelopment and refurbishment projects and has total equity of €150 million from leading Italian institutional investors.  Monte Paschi Asset Management, with over €42 million under management is the sixth-ranked SGR in Italy in terms of net funds raised  and is active both in collective and individual asset management plans. 

TIAA-CREF

With over $380 billion under management (June 2006), TIAA-CREF is the primary pension system for people working in the academic, medical and cultural research areas.  TIAA-CREF has 3.2 million clients working in 15,000 institutions.  As well as pension plans, TIAA-CREF offers products that help people with their financial needs: savings, pensions, for education, life insurance and lifetime annuities.

HINES

Founded in 1957 in Houston (Texas), Hines is one of the main real-estate operators at the international level.  Active in the sectors of real-estate investment, development and management, Hines operates in the United States, Europe and also in Emerging Markets (Russia, Poland, China, Mexico and Argentina).  The firm has offices in over 64 American cities and 15 international offices, nine of which are in Europe, and to date has developed 680 projects for over 18 million square meters.  Hines has been present in Italy since 1999 through Hines Italia, created together with the Catella family, and has over two billion euros of deals under management.