Benson Elliot moves into Italy with investments in Rome and Udine

Benson Elliot, the UK-based private equity real estate fund manager, has acquired Via Aurelia 278 in Rome and Terminal Nord in Udine (northern Italy) through the acquisition of 100% of the units in funds managed by Europa Risorse SGR (the SGR), a Bank of Italy regulated Italian real estate fund manager.  Via Aurelia is a 62-unit luxury residential development in the centre of Rome; Terminal Nord is a locally dominant retail centre in the north of Udine.

Benson Elliot’s investment reflects the firm’s confidence that Italy has turned the corner and is on the way to recovery, and its intention to be an early and significant mover in the country’s property markets.  It follows Benson Elliot’s decision in 2011 to be an early entrant into the recovering Spanish market, with the firm’s Cornerstone project in Barcelona.  There, Benson Elliot announced last month that it had concluded Barcelona’s largest letting in more than a year, to ADP, a global leader in outsourced services and human resources management.

Marc Mogull, Managing Partner of Benson Elliot, commented:

“It’s time.  The Eurozone crisis has receded, and we’ve seen Italian sovereign spreads fall 500 bps in just a couple of years.  It’s inevitable that this shift in investor sentiment, combined with an improving economy, debt markets that are slowly healing and the expectation of political change will drive a recovery in property markets.  Investing in Italy has presented challenges for many foreign property investors, but that’s often boiled down to weak local market understanding and poor execution.  We believe our long-term involvement in Italy, and our successful long-term relationship with Europa Risorse, mitigates many of those risks.”

Antonio Napoleone, Managing Director, Europa Risorse, added:

“I’m very pleased to again be working with Marc, and now with Benson Elliot.  We formed a great partnership in the last decade, managing a portfolio that ultimately grew to €800 million. During the past few years [Benson Elliot Senior Partner] Joseph De Leo and [Benson Elliot Italian Principal and country head] Leopoldo Andreis de Gregorio have been fully engaged in the Italian market, working hand-in-glove with us to watch the market and evaluate opportunities, and positioning Benson Elliot to act decisively when the right opportunity came along.  We are looking forward to working with them, and with the whole Benson Elliot team, as we move these two exciting transactions forward.”

Joseph DeLeo, Senior Partner of Benson Elliot, concluded:

“These two deals offer significant opportunity at this point in the cycle; Rome is an international city, with strong demand for residential property, particularly at the upper end of the market.  Romans understand quality, and the Via Aurelia development will offer a unique product in a unique location. Terminal Nord is a modern and successful retail asset in a thriving city, which we’ve been able to acquire at an attractive price.  It offers the kind of long-term value characteristics we like. Working with the experienced and trusted team at Europa Risorse I’m confident that both of these opportunities will deliver strong returns.”

Via Aurelia 278, Rome

The SGR has acquired the Via Aurelia residential development scheme comprising two buildings on a 10,000 sqm hill-top site in the attractive Aurelia area in the west of Rome.  With all building permits in place, the Property represents an attractive opportunity to deliver a luxury, c.€100 million end-value project in Italy’s largest residential market. The Property was acquired from a private Roman family, who previously used the existing buildings, currently vacant, as a private hospital.

The Aurelia area is an established residential neighbourhood situated 700 metres from the Vatican, offering good transport links via the metro system and road network. The site benefits from a central location and impressive views across Rome, including the nearby Vatican and St Peter’s Church, and the Castelli Romani hills to the south of the city.

The business plan involves demolishing the existing buildings and developing between 62 and 78 large luxury apartments across four new buildings, in a gated community, with direct access to an underground car park (107 spaces), a gym and spa, terraces, communal gardens and 24-hour security. The development is expected to take 2 years to complete, with construction starting in Q3 2014.

Terminal Nord Retail Park, Udine

In its second transaction, the SGR has acquired the Terminal Nord Retail Park in the northern Italian city of Udine from Pillar Retail Europark Fund, a closed-end retail fund advised and majority owned by British Land.  Pillar acquired the property in 2008 for a reported price of c.€100 m.

Opened in 2008, Terminal Nord is a modern retail park prominently located in Udine’s prime out-of-town shopping location. The 32,340 sqm Park provides 38 single-level units together with a 2,100 space car park and a detached food court. It is currently 95% occupied, and is anchored by a 9,600 sqm Carrefour hypermarket. Other significant tenants include Decathlon, Globo, Euronics and OVS.

Europa Risorse SGR has identified a number of value accretive asset management initiatives to  maximise the Park’s income. These include letting up currently vacant space, extending leases with existing tenants, reconfiguring and improving some of the retail units and public areas, and introducing additional retail pods.

 

About Europa Risorse

Europa Risorse (ER) is an Italian real estate platform that specialises in portfolio management and advisory services for the property industry.  It was founded in 2001 by Benson Elliot’s Managing Partner Marc Mogull (then head of Doughty Hanson Real Estate), and current Managing Director of Europa Risorse Antonio Napoleone (then head of BPD Property Development), with the intention of establishing a new approach to real estate investing in Italy.

ER’s ‘hands-on’ approach and strong local relationships has driven the firm’s credibility and success, from the first joint project in 2001:  the creation of a new headquarters in Milan for L’Oreal Italia. This saw the transformation of a 20,000 sqm industrial area into a 33,000 sqm,  architecturally significant home for L’Oreal in Italy.  The project was a milestone for the Italian real estate industry at the time, and was followed by ever larger projects in Milan, including Bodio Centre (67,000 sqm offices), Macciachini Centre (96,000 sqm offices and retail) and Orti Antichi (a 125-unit, high-end residential development).

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