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AXA, Apollo seal €290m Italy deal

Real estate investment volume in Italy expected to reach €5 billion by the end of this year as AXA and Apollo announce their investment in 25 retail and leisure assets

A new Italian fund sponsored by New York’s Apollo Global Management and AXA Real Estate has completed a deal to acquire a portfolio of assets from domestic property company, Prelios, for €290 million. The two firms have acquired 25 retail and leisure assets from Olinda Fondo Shops, which is a publicly listed fund managed by Milan-based Prelios, they explained.

Giving more detail, the new fund has been set up by a combination of Apollo European Principal Finance Fund II, which has been busy hovering up real estate- related assets across Europe of late, and AXA Real Estate Investment Managers, the property investment wing of the French insurance company.

The portfolio contains four entertainment centers, five cash and carry stores, five large furniture retailers, three retail malls and seven street shops and other assets stretching to 2.8 million square feet, with the portfolio mainly located in the northern Italian provinces of Piedmont, Lombardy and Veneto. The assets include Bicocca Village and Gate, one of Italy’s top performing entertainment centers anchored by an 18-screen cinema and a health club.

Alessio Lucentini, head of Italian asset management and transactions at AXA Real Estate, said this was the eighth but “most substantial” deal in Italy since AXA re-entered the country in mid-2013. AXA now has more than €1 billion of assets in Italy following the latest investment.

AXA and Apollo, however, are not the only ones to be completing real estate deals in the run up to the end of the year. Last week, for example, TIAA Henderson Real Estate said it had secured an €85 million debt facility to refinance the Serravalle Designer Outlet for its pan European fund.

Italian real estate investment volume is expected to total €5 billion this year, including single asset and portfolio transactions for all commercial market sectors. Cushman &Wakefield said it provisional data suggested the final figure would be 20 percent higher than the previous year.

The trend is expected to continue in 2015, which is in line with the EMEA market, where volumes are forecast to increase 20 percent next year to around €250 billion. Cushman &Wakefield said foreign investors were the most active players in Italy being focused either on core assets or added value opportunities. The retail market continues to represent the dominant sector of activity, covering approximately 45 percent of the overall investment volume, followed by the office and the hospitality sectors.

Stephen Screene, head of capital markets, Italy, said: “2014 has seen the confirmation of interest in the Italian real estate market on behalf of foreign investors and increasing international capital flows. This momentum will continue into 2015 and we are forecasting the return of core Italian investors to the market.”