Partners Group to acquire a EUR 260 million portfolio of prime residential properties in Milan

• The acquisition brings Partners Group's total residential portfolio in Italy to a combined GAV of around EUR 800 million
• The residential sector in Milan is experiencing thematic tailwinds, with demand driven by the growing strength of the city as a regional business center
• Partners Group will implement a transformational value creation plan and add the Portfolio to its existing property management platform

Partners Group, one of the largest firms in the global private markets industry, acting on behalf of its clients, has agreed to acquire a portfolio of prime residential properties in Milan ("the Portfolio"), from Fondo Pensione Cariplo. The Portfolio has a Gross Asset Value ("GAV") of over EUR 260 million, including a significant CAPEX program.

The Portfolio consists of six standing assets with 590 units that have a Net Leasable Area of more than 50,500 sqm. The assets include modern as well as value-add mixed-use towers and iconic neoclassical buildings that are largely located in the historic center of Milan. The transaction follows an earlier purchase of a residential property portfolio in the city in 2021. Following completion of this latest acquisition, Partners Group's total residential property portfolio in Italy will have a combined stabilized GAV of around EUR 800 million and more than 1,300 units. Through its thematic sourcing approach, Partners Group identified the residential sector in Milan as experiencing elevated demand for prime properties. This is driven by the growing strength of the city as a regional business center, an influx of high-net-worth individuals that are attracted by Italy's current tax regime, and the limited new housing supply coming to market.

As part of its value creation plan, Partners Group aims to transform the Portfolio into a Class A product, with key initiatives including renovating units and investing in amenities. Partners Group will also add the Portfolio to OnPlace, a property management platform in Milan that the firm launched in 2022 in partnership with Investire SGR. OnPlace acts as a platform for renting properties in the city and provides existing tenants with access to add-on services, including concierge, furniture packages, on-site maintenance, and brand partnerships.

Marco Denari, Member of Management, Real Estate Europe, Partners Group, says: "This acquisition is further confirmation of our thematic conviction in Milan's prime residential market. The Portfolio provides uplift potential, and its underlying rents can be re-aligned to market following a comprehensive refurbishment program. Our transformational value creation plan will focus on updating the underlying assets to be in line with our existing modern and amenitized offering in the city. Partners Group's local presence will help us stay in touch with changing tenant demands, efficiently manage these assets, and create value."

The Portfolio adds to Partners Group's existing residential exposure in Europe, which includes a EUR 400 million joint venture in Germany and EUR 200 million joint venture in Spain. In both cases, Partners Group is looking to provide a high-quality real estate product and is working with specialist local operating partners to meet local tenant needs.

Henrik Orrbeck, Managing Director, Co-Head Real Estate Europe, Partners Group, says: "As a thematic investor in the residential sector, we follow the New Living trends that are influencing how people live, including urbanization, increased mobility, and lower home ownership ratios. To capitalize on these trends, we look to acquire value-add assets in central locations with limited supply and then transform them. Given the operational intensity of these assets, we manage real estate portfolios like businesses, building vertical depth in our research, sourcing, and relationships with operating partners."

Partners Group's global real estate portfolio has a total GAV of USD 43 billion.

Partners Group was advised by Dils, Legance, Clifford Chance, and Rina Prime on the transaction.