(MILAN) – Hines, the international real estate firm, has entered a joint venture with PGGM, the Dutch pension fund service provider, to launch a separate account program primarily targeting high-street retail, office and mixed-use value-add developments in Milan, Italy.
Hines will co-invest alongside PGGM into the account, which has an initial commitment of €155 million of equity, supported by moderate debt finance, and is expected to grow as further capital is deployed.
Targeting prime assets in the heart of the historic city of Milan, the account is committed to pursuing a sustainability agenda through refurbishment of assets to meet the highest international standards of building energy efficiency, to upgrade the quality and enhance their value, in keeping with Hines’ philosophy to real estate development.
PGGM and Hines have already completed the first acquisition for the account, purchasing a portfolio of three buildings from Banco BPM for €110 million. Alongside the 10-story Piazza Liberty tower in the center of Milan, the portfolio includes two buildings in the historic center on Via del Lauro and Via Mazzini. The three assets provide a mix of retail and office amenities.
With a total surface area of 20,000 square meters, the three buildings will undergo an extensive €30 million refurbishment and renovation program to transform the buildings into high quality, contemporary high-street retail and office spaces to meet current demands.
Lars Huber, CEO for Hines Europe, said: “Hines and PGGM have a long relationship, developing real estate together since the 1980s. PGGM is a trusted, highly respected partner and we are pleased to be extending our relationship through this account. We are pleased to have launched this account in parallel with the first joint acquisition, and look forward to growing it further.”
Tinka Kleine, Senior Director Private Real Estate for PGGM, said: “Milan has become part of our city focused investment programme because it offers great investment opportunities, both for achieving attractive financial returns and for improving the sustainability performance of well-located assets. Hines’ track record in securing and executing such strategy provides a perfect base for a successful partnership in Milan.”
Mario Abbadessa, Italy Country Head for Hines, adds: “We are very pleased to have earned PGGM’s trust. This will allow us to continue Hines’ focus strategy on permanent locations in Italy into which we have invested around €1 billion over the last 18 months. Historical, high-quality buildings in prime locations are generally resilient to Italy’s political and economic volatility and Milan is one of the most attractive cities in this respect.”
On the account’s first acquisition, Vitale&Co has acted as financial advisor, Legance as legal advisor and Reas and Studio Asti as technical advisors.
PGGM is a cooperative Dutch pension fund service provider. Institutional clients are offered: asset management, pension fund management, policy advice and management support. On June 30, 2017 PGGM had €206 billion in assets under management. The PGGM cooperative has approximately 725,000 members and is helping them to realize a valuable future. Either alone or together with strategic partners, PGGM develops future solutions by linking together pension, care, housing and work. www.pggm.nl
Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 201 cities in 21 countries. Hines has approximately $100 billion of assets under management, including $54.5 billion for which Hines provides fiduciary investment management services, and $45.5 billion for which Hines provides third-party property-level services. The firm has 113 developments currently underway around the world. Historically, Hines has developed, redeveloped or acquired 1,262 properties, totaling over 414 million square feet. The firm’s current property and asset management portfolio includes 529 properties, representing over 213 million square feet. With extensive experience in investments across the risk spectrum and all property types, and a pioneering commitment to sustainability, Hines is one of the largest and most-respected real estate organizations in the world. Visit www.hines.com for more information.