Blackstone has sold Via Montenapoleone 8 in Milan to luxury goods company Kering for approximately €1.3 billion, representing the largest-ever single-asset transaction in Italy.
The property is located in the Quadrilatero della Moda high-end fashion district on Via Montenapoleone, the most expensive shopping street in Europe and second only to Fifth Avenue in New York on a global scale. The building was built in the 18th century and comprises around 127,000 square feet across five floors, of which around 54,000 square feet is retail space, according to an announcement.
The property is fully occupied by tenants including fashion brands Prada and Saint Laurent, which is owned by Kering, as well as Caffè Cova, the historic Milanese café founded in 1817 and owned by French luxury goods company LVMH. The asset has a nine-year weighted average lease term, PERE understands.
“This transaction represents an excellent outcome for our investors and demonstrates exceptional investor demand for high quality real estate in the strongest markets,” said Blackstone’s head of European real estate, James Seppala, in a statement.
Kering purchased the asset from a subsidiary owned by Blackstone Property Partners Europe, Blackstone’s open-end Europe-focused core-plus fund.
The New York-based manager acquired the property for Blackstone Property Partners Europe Holdings in November 2021, when it purchased a mixed portfolio of 14 assets, mostly in Milan, for €1.1 billion from Italian property company Reale Compagnia Italiana. In addition to Via Montenapoleone 8, the portfolio included two office properties, nine residential assets and a five-star hotel in Milan, as well as a historical gallery in Turin.
France-based Kering owns a range of fashion and luxury goods brands including Gucci, Balenciaga and Alexander McQueen. In the announcement, it said the investment was part of its “selective real estate strategy, aimed at securing key highly desirable locations” for its fashion and luxury brands. Back in January, Kering purchased a property on Manhattan’s Fifth Avenue for $963 million.
The property on Via Montenapoleone was Blackstone’s most recent retail acquisition. There were reports last month that the mega-manager is purchasing 130-134 New Bond Street, a retail and office block situated on London’s most upmarket shopping street, for £230 million ($291 million; €268 million). The property is being sold by Canadian investor Oxford Properties and Swiss luxury goods group Richemont, which acquired it in a joint venture for £197 million in 2014. The building houses retailers Breitling and Smythson in addition to office tenants Newmark, APAM and Hilco.
It is understood that Blackstone continues to see opportunities in luxury retail in prime locations across Europe such as London, Paris and Milan, but is also taking an increasingly expansive view on the retail sector as a whole in Europe.
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