News and trends

Financing from German banks is supporting many of the development projects and deals happening in Italy. The main established players are Aareal Bank, Eurohypo and Hypo Real Estate Bank. And now there’s a new player: IKB, which has just entered the real estate sector, hiring Antonio Biggi, an Italian manager with vast international experience, to head the department.

On the M&A front, the market is eagerly awaiting the development of the protocol of the agreement signed in February 2007 by the two property holdings of the Italian-French entrepreneur Charles Ruggieri (from the group Foncière des Régions) and the Italian Leonardo Del Vecchio, the patron of Beni Stabili, which will result into bringing the two large property companies closer together. The deal will allow for the creation of a European real estate company with a presence in France, Italy, Germany and the Benelux countries, with over 14 billion Euros of assets under management and more than 750 experts from the sector.

Photo: The Australian investment company Babcock & Brown is developing “La Torre delle Arti”, a 20,000 square metre residential development project.

The takeover of the Italian BNL-Banca Nazionale del Lavoro by the French bank BNP Paribas has also created a big new real-estate player: BNP Paribas RE is actually the umbrella group which now also comprises one of the largest Italian real estate fund companies, with a portfolio of 23 properties for retail, offices, and also development operations.

According to Nomisma, there are 116 authorised real estate funds, 71 percent of which are “contribution funds”, and there are over 50 asset management companies active in this area. Up until now, the real estate funds have brought 23.7 billion Euros of investment in real estate, with net assets of over 18.5 billion, a 900 percent increase since the year 2000. Among these, the Boccaccio Fund plays a special role, focussing on institutional investors. It was set up by the Italian listed company Aedes together with the British company Cordea Savills: the latter has acquired, for 142 million Euros, 81.7 percent of the fund’s stake, out of a portfolio of 19 retail properties, with a total area of about 107,000 square metres.

Preparing to make their debut, the SIIQ, Società di Investimento Immobiliare Quotate (Listed Real Estate Investment Companies) are being launched with the latest tax laws, and are like an Italian version of the REITs. It’s being anticipated that they will have success similar to that of the real estate funds and that they will effect a greater influx of international capital together with an increase of the presence of real estate companies on the stock exchange.

And finally, the presence of real estate private equity is still not very significant. But abroad the combination of private equity and real estate has by now taken on the look of a true “alternative asset class”. In recent years, Italian real estate has been able to transform itself faster, and perhaps this strategy will soon also become the mainstream in Italy.

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