Hines and Blue Noble JV Acquires Via Borgospesso 15 in Milan to Create 70 Serviced Apartments for €70m

Main Photo: The current building at Via Borgospesso 15 in Milan

Date: June 2021

Location: Via Borgospesso 15, Milan, Italy

Name: TBA – opening 2023

No. of Keys: 70 apartments

Seller: TBA

Buyer: Hines, the international real estate firm, in joint venture with Blue Noble, an internationally renowned real estate investment manager based in London, has invested in the prestigious Via Borgospesso 15 in Milan with the aim of creating over 70 serviced apartments. Worth more than €70 million, the investment was completed via the recently established Smart Stay fund, managed by Antirion SGR.

Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 240 cities in 27 countries. Hines oversees a portfolio of assets under management valued at approximately $160.9 billion, Historically, Hines has developed, redeveloped or acquired approximately 1,450 properties, totalling over 485 million sqf.

The firm has more than 180 developments currently underway around the world. With extensive experience in investments across the risk spectrum and all property types, and a pioneering commitment to ESG, Hines is one of the largest and most-respected real estate organisations in the world.

Blue Noble is a differentiated real estate investment management business. Blue Noble strives to source, structure and manage real estate opportunities alongside an aligned and personalised investor experience.

They offer specialist real estate investment management, through club deals, segregated accounts and funds on a global basis. With initial commitments of over $550 million of real estate assets and new capital,

Only founded in 2017 by a team of real estate professionals from HSBC Alternative Investments Limited, headed up by Paul Forshaw, CEO (formally Global Head of Real Estate for HSBC Alternative Investments Limited), Toby Evans, Chief Investment Officer; Harry Heathcoat Amory, Chief Operating Officer and Will Michell, Partner.

During their tenure with HSBC, the team transacted in and managed over $5 billion of real estate assets across the US, Europe and Asia.

The Smart Stay Fund was activated in March 2020, and is aimed, until now at acquiring buildings in Italy, mainly in the cities of Milan and Rome, for conversion into hotels branded citizenM, well-known hotel chain focused on the “smart luxury” segment. The hotels will be then managed by citizenM.

This citizenM fund has finalised its first purchase; it’s a detached building of architectural and cultural interest of about 7,000 sqm in the centre of Rome. The main use of this asset was as offices, but the building will undergo renovation with change into hotel use.

The investment is confirmation of Hines’ living-sector focused strategy to reposition an asset of high historical value which is located in one of the city’s most iconic districts, attracting local and international visitors. It looks ahead to the growing “home away from home” trend, seeking to meet future demand from tourists and professionals visiting Milan in search of welcoming accommodation without giving up the benefits of a modern and efficient hospitality venue.

This new living model aims to provide a concrete solution to the current limited availability of high-quality short-stay solutions located in Milan’s historical centre and builds on positive messages of recovery from the tourism and hospitality sectors, with the prospect that they can return to pre-pandemic levels in 2023 and record a further increase ahead of the 2026 Winter Olympics.

The property, which has a surface area of around 5,000 sqm, will be extensively restructured, adhering to the highest international standards of energy efficiency and sustainability. With a planned opening in 2023, the commercial strategy for the venue envisages units rented out for brief periods. The property will have a full range of services, including coworking areas, retail spaces, areas for working out, an elegant internal courtyard and a panoramic rooftop offering striking views over Milan.

The individual apartments will feature a modern and comfortable design, characterized by a distinctive identity inspired by sustainability and efficiency. There will be a special focus on large, communal spaces designed for the safety and wellbeing of guests with different needs.

The Borgospesso deal strengthens the strategic collaboration between Hines and Blue Noble. This partnership has resulted in investments in Italy totalling approximately €200 million in recent years, all in the living sector. These include the Giovenale 15 and Ripamonti 35 student housing assets in Milan, to create a residential product focusing on a community and experiential-oriented concept of space, and the residential asset in Corso Italia in Florence.

“Hines continues to invest significantly in the living sector,” adds Mario Abbadessa, Senior Managing Director and Country Head of Hines Italy. “Within this segment, serviced apartments show strong potential for development and growth with the backdrop of a limited supply in the Milan area. Our target is to invest €2 billion in the next 24 months both in the living space via student housing, affordable residential units and serviced apartments, and in the logistics sector. We are sure that the resilience of Milan will help it emerge from this difficult period even stronger.”

“We are delighted with the acquisition of this prized asset in Via Borgospesso” explained Paul Forshaw, CEO of Blue Noble. “This is the fourth strategic investment we have made in Italy with our longstanding partners, Hines, and grows our portfolio of assets for student residences or short-term stays. We have a strong conviction in the living sector and believe that these two segments in particular are set to grow in the primary Italian markets.”

Hines was supported by BIP – Studio Belvedere Inzaghi & Partners and DLA Piper in the legal, regulatory, administrative, planning and financing aspects of the transaction. EY provided tax assistance, including for the structuring and acquisition phase of the transaction. Yard Reaas Group worked on technical issues and HVS Global Hospitality Services on sales services.

THPT Comment: Hines, who also have their fair share of hotel assets, seem keen to make their mark into the serviced apartment sector….

First Seen: Hines press release

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