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Savills IM forms €300m domestic fund for Italian investors

The real estate investment management arm of property services firm Savills said the move demonstrates the shift in focus from overseas investors to those based domestically. 

Savills Investment Management (IM), the real estate investment arm of London-listed property services firm Savills, has launched a new fund which it will manage on behalf of two Italian investors.

The Mercury Fund, which attracted €300 million, was launched for Conad, the largest consortium of independent retailers in Italy, and Gruppo Cattolica Assicurazioni, a leading Italian insurance company.

The vehicle was structured to allow three Conad member companies to sell and lease back retail properties across central and northern Italy on long-term leases, thereby allowing the consortium to concentrate on its core retail business.

As part of the fund structure, three sub-funds were created, divided as per the assets of the three members, with each to be managed by Savills IM. Each of the three Conad members will own a 49 percent stake in their respective sub funds, while Gruppo Cattolica Assicurazioni will hold the remaining 51 percent.

“We are proud to have actively contributed to the development and execution of this important project, which consolidates over 12 months of work and underlines our reputation as an independent operator with highly specialised resources and a long-term strategic vision,” said Giuseppe Oriani, managing director of Savills IM.

“It represents a significant milestone for our activities in Italy, which traditionally were focused on the development of initiatives aimed mainly at foreign investors in the Italian market,” he added.

A preliminary loan of €170 million has been granted to the fund by Italian banking groups, Banca IMI (Gruppo Intesa) and Unicredit.

This fund launch is the latest activity in a busy summer for the investment manager, which in May appointed former chief operating officer James Bury as chief executive for Europe and Michael Flynn, who worked as managing director and head of South East Asia and Australia, as chief executive in Asia Pacific. Three weeks earlier, Savills IM also appointed former Pradera executives Richard Gore and Neil Varnham as executive directors.

Also in May, the firm launched its second German retail fund which it said would focus on high street assets throughout the country. The firm will employ core and core-plus strategies for the fund, but would also allow for the purchase of some value-add assets.