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CPP Investments & Lendlease in €400 million JV in Milan

A CGI of the Phase 1 project at Mind in Milan

Canadian and Australian capital is showing its faith in Milan’s prospects with a €400 million investment in Mind, the Italian city’s new innovation district on the site of Expo2015.

CPP Investments, the Canadian pension fund, is contributing €200 million to the project, the same as JV partner Lendlease. Building work will start at the end of the summer and by the end of 2023 the district will have 190,000 sq m of offices, 300 homes for rent, a hotel and retail spaces with an estimated total value of €2.5 billion.

The €400 million will be invested in a new Italian real estate fund targeted at the development of Phase 1, West Gate of Mind (Milan innovation district).

“For the first time in Italy there will be a real estate fund that will not be dedicated to one sector but will invest in all asset classes to build an eco-system for innovation and research”, said Andrea Ruckstuhl, head of Continental Europe, Lendlease.

Andrea Ruckstuhl, head of Continental Europe, Lendlease

It is a long-term investment for a long-term partnership: CPP Investments and Lendlease are already working together on a tower office block in Sydney and on Elephant Park, an 800-unit build to rent development in central London.

It is the first investment in Italy for CPP Investments, which has €340 billion in AUM and a presence all over the world. Around 10% of the pension fund’s assets are invested in real estate.

The “visionary project” of an innovation district is one factor that convinced CPP to make its debut in Italy, said Andrea Orlandi, managing director and head of real estate investments Europe, CPP Investments. Another incentive was the partnership with Lendlease.

Italy’s political climate now more conducive for investment

The third factor was the improved political situation in Italy, said Orlandi: “We have been looking at the country for a long time, but now with Mario Draghi at the helm of the government it is a good time to invest in Italy”. The next investment could be in the logistics sector, he added.

Mind is a public/private partnership between the company Arexpo, that owns the land and the Milan and Lombardy city and regional authorities to develop an area of over 1 million sq m.

The plan is to turn it into an innovation district  focused on life sciences, with Milan University’s new campus, a hospital, Human Technopole, a life sciences research institute, and Federated Innovation, an ecosystem of over 100 companies and SMEs involved in new projects in the life sciences sector.

The district will be a place to work and innovate but also a place to live for around 60,000 people, with apartment blocks, meeting spaces and shops.