Diversified real estate investor and manager, Cromwell Property Group (Cromwell), has acquired Pirelli Tyre’s research and development facility in Milan on behalf of a new Korean capital partner for €88 million. Cromwell has also been appointed as asset manager of the investment.
The facility is 34,380 sqm (net lettable 21,670 sqm) with 243 parking spaces and an auditorium, consisting of three floors above ground and three floors below. It is located in the rapidly expanding Bicocca district of Milan, close to a number of other Pirelli facilities and international businesses including Siemens, Panasonic and Phillips.
The asset is fully let to Pirelli on a triple net lease expiring in December 2032.
Pirelli is a multinational company, listed on the Milan Stock Exchange since 1922. It is the fifth largest tyre manufacturer in the world, operating commercially in over 160 countries. It has 19 manufacturing sites in 13 countries and a network of around 14,600 distributors and retailers.
Lorenzo Caroleo, Cromwell’s Head of Italy commented on the significance of the off-market acquisition;
“Milan is the most liquid and dynamic city in Italy and one of the fastest growing cities in Europe in terms of office rental growth. In fact, through the first three quarters of 2018, take up was 308,000 sqm, already exceeding the five-year average, and up 97% on Q3 2017, indicating a lot of interest in Milan at present.”
“Bicocca has been attracting a lot of investment interest due to its location and accessibility by subway and car, as well as the expansion of the commercial area and its services.”
“This acquisition demonstrates the advantage created by having a locally-based team who are able to guide investors past the headlines and macro-level economic volatility to identify and secure high-quality assets let on strong covenants, capable of delivering stable income over the longer term,” he concluded.
As at 31 December 2018, Cromwell managed 18 assets in Italy valued at €464 million, covering over 350,000 sqm and let to more than 50 tenants.