Kuwait’s Sovereign Wealth Fund has made its debut in Italy with a €500 million investment in an urban regeneration project in Milan.
Kuwait Investment Authority (KIA) has partnered with US company Hines in MilanoSesto, a massive 1.5 million sq m development just north-east of Italy’s economic and business capital.
KIA is developing Unione Zero, a 250,000 sq m plot of land where it plans to build 11 separate mixed-use buildings that will provide a mix of offices, apartments for rent, student housing, social housing and a hotel. All of the buildings will be sustainable and eco-friendly and some will be built entirely in wood. Building work is due to start in June 2021.
Hines is acting as strategic advisor and development manager, while Prelios is in charge of project management and Cale Street, a London-based real estate investment advisor, has facilitated the deal. KIA, the first sovereign wealth fund to be created back in 1953, has plenty of firepower with $53 billion in its coffers, but it had never invested in Italian real estate before. Hines has invested over €3 billion in Milan over the last few years.
Project will create sustainable urban neighbourhood
MilanoSesto is a regeneration project of a former industrial area to create a new sustainable urban neighbourhood with new homes, retail, offices, co-working spaces and hotels, new squares and public parks and 45 hectares of green space. The masterplan is by Foster+Partners.
“One of the most dynamic and promising areas in Europe will have a new sustainable and innovative residential development, characterised by affordable rents, quick transport links to the centre of the city and modern services for students, families and all generations,” said Mario Abbadessa, country head Italy, Hines.
In line with the new emphasis on health and wellness MilanoSesto will also become “The City of Health and Research”, a hub of clinical and scientific excellence, with some of Milan’s leading hospitals opening new teaching facilities and medical research laboratories in the new area.