Generali Real Estate to invest more in London offices

Times Square in the City, which Generali Real Estate has just acquired from Blackstone

Generali Real Estate plans to invest €2.5 billion in London and other European capitals this year.

The property arm of the Italian insurance company has just completed the acquisition of Times Square, an office building in the City sold by Blackstone. Generali won a bidding war for the seven-floor Queen Victoria Street asset by offering a reported £465 million.

“The acquisition marks the return of Generali Real Estate to the London market,” said Aldo Mazzocco, head of private markets and real assets, Generali Asset & Wealth Management. “We confirm our conviction about London as one of our main investment targets.”

It is the second major investment in the office sector in the UK capital after the acquisition of the One Fencourt building in Fenchurch Street in 2019, which was followed by a pause due to Brexit uncertainty and then the pandemic. Now the group is actively looking for more opportunities in the UK capital.

“We will continue to rebalance our portfolio in 14 European capitals, including Paris, London, Prague and Berlin,” Mazzocco said. “We have a very selective approach and look at over 500 opportunities to then zoom in on thirty.”

The group is already close to finalising other deals in the UK after the Times Square acquisition, he said, and is focusing on offices, residential and logistics.  

Generali Real Estate invested €1.7 billion in 2019 and €1 billion last year, but this year the plan is to more than double that to €2.5 billion.

Aim is to transform neighbourhoods, emulating Citylife in Milan

So far Generali has invested in residential in Milan, Frankfurt and Clichy, but it is looking for opportunities elsewhere, ideally on a large scale. The plan is to buy and transform “entire portions of neighbourhoods, replicating the successful model of Citylife in Milan”, he said.

Milan is one of the most vibrant cities in Europe and the real estate market is very lively, thanks also to the strong presence of foreign investors and to the City authorities who have wisely regulated but not hindered urban regeneration projects, Mazzocco said.

The lessons of the pandemic will be “choosing better homes to live in, while technology will allow us to have more flexible offices with the option of working from home but also returning to the desk to exchange ideas and find inspiration”, he said.

The group is not investing in retail at present, because “the multi-channel model is now dominant and operators must be vigilant and spot the new trends”.

Generali’s Italian portfolio is worth €11 billion and the group has €33.4 billion of assets under management.