Real estate investor and manager, Cromwell Property Group (Cromwell) has continued to progress its ‘Invest to Manage’ strategy, acquiring the Pirelli Tyre facility in Milan on behalf of a new Korean capital partner, Korea Investment Management Co., Ltd (KIM). Cromwell has been appointed asset manager to the investment. The seller is the “All Star” fund managed by Kryalos SGR.
The facility has a net lettable area of 22,700 sqm and comprises four floors above ground and four floors below. It is located in the established, and still rapidly expanding, Bicocca district of Milan, close to a number of other Pirelli facilities and international businesses including Philips, ING and Deutsche Bank.
The asset is fully let on a long lease to Pirelli, the iconic Italian brand founded in 1872 and one of the world’s top tyre manufacturers. Operating in more than 160 countries, today Pirelli is entirely focused on the consumer tyre segment and fully committed to the premium and high value tyre market.
Commenting on the interest from Asian capital with regards to investing in Europe, Cromwell CEO Paul Weightman said: “As part of Cromwell’s ‘Invest to Manage’ strategy, we have been engaging with potential capital partners who are keen to access our unique funds and asset management platform in Europe.”
“As a result, we are continually on the look-out for new opportunities to deploy capital both in Italy and in the rest of Europe. This opportunity is the first of what we anticipate will be a series of single-asset mandates for Asian capital partners,” he concluded.
Lorenzo Caroleo, Cromwell’s Head of Italy commented on the significance of the acquisition: “We are delighted with this transaction as it represents the start of a new relationship with a capital partner that Cromwell is looking to work with in more European jurisdictions. We are also proud to have acquired such a prestigious strategic asset, let on a very long lease to Pirelli Tyre, one of the most successful and well-recognised Italian brands in the world.”
“For real estate investments, Milan is the most liquid and dynamic city in Italy with some of the fastest growing office rents in Europe. This acquisition demonstrates the advantage created by having a locally-based team able to guide investors to identify and secure high-quality assets let on strong covenants, capable of delivering stable income over the longer term,” he concluded.
Paolo Bottelli, Kryalos’ CEO commented on the divestment: “The disposal of the Pirelli R&D asset is part of our strategy to realise value from the All Star Fund’s real estate portfolio. It also highlights that the continued interest from international investors in the Italian real estate market is not confined to the historical city centers, but is also reaching areas like the Bicocca business district.”
“Finally, the transaction confirms our ability to meet investor expectations and deliver successful returns,” he said.
Cushman & Wakefield advised Cromwell Property Group on the acquisition. Gianni, Origoni, Grippo, Cappelli & Partners acted as legal advisor, while J&A Consultants acted as technical advisor. Following the transaction, Cromwell now manages 19 assets in Italy valued at €560 million, covering over 370,000 sqm and let to more than 50 tenants.