Shanghai-headquartered conglomerate Fosun has acquired a landmark commercial office property in Milan, its second mega property investment in Europe in a month.
Fosun, via one of its insurance subsidiaries, paid around €345 million for Palazzo Broggi, which formerly served as the headquarters of the Italian bank UniCredit.
Palazzo Broggi is a 505,903 square feet office building located in the centre of Milan, next to Milan’s commercial and cultural district called Piazza del Duomo.
Alex Gong, executive president of Fosun Property, said the acquisition marks a significant step for Fosun’s expansion in continental Europe.
“The perfect location of the building provides an excellent investment opportunity. And we are well aware of the historic importance of Palazzo Broggi to the city of Milan, and we are confident that we will maintain this historic building in excellent condition.”
Fosun’s redevelopment of the property will be one of the largest urban redevelopment projects in continental Europe and the new concept could host retail, offices, luxury hotels and serviced apartments.
Xu Xiaoliang, board director and vice president of Fosun, and president of Fosun Property, further added: “Europe is the core market for global real estate investment and it is one of the top priorities for Fosun’s global strategy. Fosun is optimistic about the prospect of investment in core properties in major European cities. Fosun will continue to strengthen the cooperation with its insurance business and expand the real estate presence in Europe.”
The transaction is the largest single asset sale in Italy this year, and is also Fosun’s first foray into Italian commercial real estate.
Fosun has long been vocal about its plans of expanding its portfolio internationally, with Europe being its top focus. In a recent interview with PERE, Gong said office and retail sectors in Europe are been eyed for investments currently while US and Australia are next on the radar.
In the beginning of July, Fosun made its first platform buy in Europe when it acquired a major stake in the London-based private equity real estate firm Resolution Property. The newly-created joint venture company called Resolution Property Investment Management will act as Fosun’s main real estate investment manager for investments in value-add real estate opportunities across Europe.