In H2 2016, Invel acquired two Italian real estate portfolios then held in listed, closed-end Italian property funds managed by BNP Paribas REIM SGR which had an expiration date (without possibility of renewal) of 31st December 2016 at a purchase price of €83.8 million.
Together, the portfolios were composed of thirteen commercial assets with a total GLA of c. 91,000 sqm located across Italy with concentrations in or near Milan, Rome, and Naples. Multi-tenanted, many of the properties had been historically poorly managed, in part due to a lack of investment from the previous fund owners, resulting in an average vacancy rate of 43% upon acquisition by Invel.
The purchase price achieved by Invel corresponded to a price per sqm of circa €920, representing a 60% discount to the latest market valuations as well as a discount to both historic valuation and replacement cost. Invel was able to negotiate such a low purchase price which, despite the significant vacancy rate of 43%, resulted in a very attractive entry yield of 10.3% on in-place rent.
The transaction was sourced off market through Invel’s direct relationship with the seller.
Date of Project