Italy’s largest urban regeneration project is going ahead: Coima and Redo have agreed a deal to take over the €3.5 billion development of the MilanoSesto project from Hines and Prelios.
Coima, the sustainable investor and developer, and Redo, an affordable housing specialist, are taking 100% ownership of MilanoSesto SpA, the company that owns the majority of the vast regeneration site in the north-east of Italy’s economic and financial capital.
The two partners will also develop the social housing element on the site, taking over from Hines and Cale Street. Intesa Sanpaolo and a pool of other lenders have agreed a set of debt-to-equity arrangements to recapitalise MilanoSesto SpA, bringing renewed impetus to the stalled project.
“MilanoSesto is one of the most important urban regeneration projects in Europe,” said Manfredi Catella, founder & CEO, Coima Sgr. “Coima’s commitment alongside Redo and Intesa Sanpaolo provides a unique blend of skills to support Milan and Italy’s growth. With a deep sense of responsibility, together with our partners, we will take forward this strategically important project with the aim of ensuring it becomes an international benchmark for socially and environmentally sustainable urban redevelopment, attracting national and international investors with strong ESG commitments, creating a thriving place fit for a zero-carbon future.”
A former industrial site, MilanoSesto has a total area of more than 1 million sq m. The site is spread across two distinct areas, the largest of which covers approximately 840,000 sq m and is owned by MilanoSesto SpA. This area, which will now be brought forward by Coima and Redo, mainly comprises residential development, including subsidised and social housing, as well as the City of Health and Research, a centre of clinical and scientific excellence which belongs to the Lombardy Region, and a park of approximately 45 hectares.
The 155,000 sq m Unione Zero area includes 27,000 sq m for a social housing project, now owned by Coima and Redo. This will consist of approximately 350 new apartments for employees of the City of Health and Research and its related facilities. The residences will be developed through a newly established fund, managed by Redo and subscribed by Re-City, Redo’s City Regeneration Fund, and the Coima Housing Fund. The latter was established by Coima to invest in sustainable housing and is backed by Intesa Sanpaolo and a range of leading Italian institutional investors.
The remaining part of the Unione Zero site, approximately 128,000 sq m, will continue to be owned by the Unione Zero fund, managed by Prelios SGR, with investment from Cale Street and Hines. This area will retain its current uses under the existing plans, which includes offices, student housing, hotel and open-market housing.
As part of the agreement, a series of complex financial operations have been concluded with Intesa Sanpaolo, the project’s main financier, and other lenders, including Unicredit, Banco BPM and IFIS, involving the conversion of around €900 million of debt into equity. This ensures the recapitalisation of the project, contributing to the recovery and further revitalisation of an area that is strategically important to the Milanese metropolitan area, Lombardy and Italy.