Barings Enters Italian Residential Build-to-Rent Market
Barings, one of the world’s largest diversified real estate investment managers, on behalf of Barings Real Estate European Value-Add Fund II (BREEVA II), has acquired a build-to-rent (BTR) development opportunity in Milan.
Purchased through an Italian real estate fund managed by Savills IM SGR, the off-market transaction represents Barings’ first deal in the Italian residential property market and makes it one of the first major real estate companies to invest in the country’s emerging BTR market.
Barings will redevelop the current disused office and industrial complex into a c. 9,500 sq m Grade A BTR scheme of 170 units, with completion expected during 2024. The scheme will feature strong environmental credentials, targeting a LEED Gold certification and net zero carbon emissions, as well as social amenities and facilities.
The development is located in the “Bovisa” district, northern Milan, a residential and university neighbourhood in Italy’s financial capital that is undergoing a major regeneration. The scheme will benefit from the nearby Milano Bovisa train station and the subway at Dergano station, with the city centre, central Milan railway stations, and Malpensa Airport all within 30 minutes distance.
Marco Corti, Managing Director and Head of Italy Real Estate at Barings, said: “This off-market acquisition reflects the strength of Barings’ local knowledge. The Grade A build-to-rent development, which will target excellent ESG credentials and benefit from the regeneration of the wider neighbourhood, will make it a highly desirable place to live. With low unemployment and one of the highest housing supply-demand imbalances in Europe, investing in quality, much-needed new homes in Milan is very attractive and makes this an even more compelling addition to BREEVA II’s portfolio in Italy.”
Gunther Deutsch, Managing Director, Germany, and Head of European Real Estate Transactions at Barings, said: “This asset is a strong addition to our European alternatives portfolio. We have already invested in the BTR sector in the Nordics and the UK, now in Italy too, and soon we will expand that sector investment to Germany. Our plan is to invest close to €1bn across the different alternatives like build-to-rent/build-to-sell, student housing and co-living. As we face strong pricing in this sector, we are keen to partner with developers early in the process and like to cover the risk spectrum, from value-add to core, in our preferred markets of the Nordics, the Netherlands, Germany, Italy, France, Spain and the UK.”
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Tali Robinson/Polly Warrack/Ben Monteith (SEC Newgate)
Barings Real Estate
Barings Real Estate (BRE) is a part of Barings and offers a broad range of global investment opportunities across the private debt and equity investment markets. BRE invests in all major property sectors and offers an expansive range of financing solutions to real estate borrowers. Follow us on LinkedIn at www.linkedin.com/showcase/barings-alternative-investments.
Barings is a $371+ billion* global investment manager sourcing differentiated opportunities and building long-term portfolios across public and private fixed income, real estate, and specialist equity markets. With investment professionals based in North America, Europe and Asia Pacific, the firm, a subsidiary of MassMutual, aims to serve its clients, communities and employees, and is committed to sustainable practices and responsible investment.
*Assets under management as of March 31, 2022