Italy-based UniCredit Real Estate has finalised the contribution of a portfolio of real estate assets into a real estate investment fund managed by Fondi Immobiliari Italiani and the placement of 62% of the fund’s units to institutional investors.
Of the remaining fund units, UniCredit Real Estate (URE) will keep a 33% stake, whilst an additional 5% is expected to be sold to institutional investors by the end of February 2009.
The real estate assets contributed into the fund comprise 72 commercial real estate properties (including the buildings of Piazza Cordusio and Livio Cambi in Milan and 70 banking branches of the group) with an overall portfolio value of approximately E800 million, 60% debt financed by a pool of banks.
Sale of the fund’s units to institutional investors is expected to generate a capital gain, net of taxes, of around E280 million in the fourth quarter 2008. The fund will have a 15-year term and is expected to provide investors with stable profitability due to a long term rental agreement underwritten by the fund itself with URE.
According to the group, the rental agreement will last 18 years with an option for a further six-year extension, and is structured to provide the necessary flexibility required to manage the group’s commercial banking network; additionally, UniCredit Group will have a right of first refusal providing the option to buy-back selected buildings deemed to be of strategic importance for the group.
