Barings strikes first Italian RE deal – Exclusive

Barings Real Estate Advisers, the Charlotte, North Carolina-based investment manager, has made its first acquisition in Italy, a mixed-use office and retail asset in Milan, as part of its pan-European value-add investment strategy.

The 229,000-square-foot building is located in Via Pola 9/11 in the city’s business district of Porta Nuova. Built in 1970, the property has nine floors above ground, containing offices and retail, as well as two underground floors. The building has 144 parking spaces and is served by five nearby tube stations and two high-speed railway stations.

Barings said it would be repositioning the asset, which is partially-let, to provide Class A office space.

The building was acquired from an undisclosed major Italian insurance group in an off-market transaction. The investment is being made through the firm’s Italian-focused investment vehicle, Value Add I Italy, which is managed by Kryalos SGR. Barings would not disclose any further information about the fund.

Gunther Deutsch, European head of transactions at Barings Real Estate Advisers, said: “The acquisition of this office building which is strategically located in Milan is perfectly in line with our pan-European value add investment strategy and it’s an excellent entry point for Barings Real Estate Advisers in Italy.” 

The firm began eyeing the Italian market when it hired Valeria Falcone as country head in June 2015.

“This off-market acquisition is exactly the type of transaction we are looking to target and represents an important milestone for our investment strategy in Italy,” Falcone said. “The asset benefits from a prime location within the CBD district, an area with fast-growing demand and limited supply, with excellent real estate fundamentals that will be repositioned through active asset management,” she added,

The firm was most recently in the news in October, when it hired Göran Bengtsson as its head of the Nordics in order to grow its European real estate platform.

In September, Barings Real Estate Advisers, which is a subsidiary of Massachusetts Mutual Life Insurance Company, completed a rebranding from its previous name of Cornerstone Real Estate Advisers. This enabled the firm to consolidate with other MassMutual subsidiaries, the parent company said last month. As such, Cornerstone is now linked with Babson Capital Management, Wood Creek Capital Management and Baring Asset Management, all under the Barings brand, in a change that was first announced in March.