Italy's Milan sees positive surge of Chinese real estate investment

Fosun, one of China's leading privately-owned groups, has purchased the former Milan headquarters of Italian bank UniCredit, another move that highlights an increasing interest of Chinese investors in real estate in Italy, and particularly in its business capital Milan.

"This is a great example of the strengthening Italian market attracting global capital and the increasing push by Chinese investors into new markets," Nick Hendy, Senior Director of EMEA Capital Markets at CBRE, which advised the vendor, IDeA FIMIT, told Xinhua on Friday.

Earlier this week, IDeA FIMIT, a leading asset management company in Italy, announced with a statement published on its website that it has sold the historic palace in the heart of Milan at 345 million euros (376 million U.S. dollars) to an "international investor".

"We are well aware of the historic importance of Broggi Palace (the former UniCredit headquarters) to the city of Milan, and we are confident that we will maintain this historic building in excellent conditions," a spokesperson of Fosun Property told Xinhua on Friday, confirming the purchase.

Analysts said the move by Fosun, which has embarked on an expansion of overseas deals in recent times, came amid increased economic stability in Italy. In particular, the country's economic center Milan has seen a surge of deal requests.

"Structural reforms, particularly in terms of tax, competitive labor costs and changes to the banking system, as well as corporate stability that has helped the net wealth of households have strengthened the Italian market," Paolo Bellacosa, CBRE Managing Director of Capital Markets Italy, noted.

"Lastly, we are seeing an increase in the balance of trade, for example we are exporting more and have better  GDP  growth prospects. All this attracts more global capital to our country," he went on explaining to Xinhua.

"I chose Italy as a launching pad because I love this country, its history, its culture and especially Milan, the capital of luxury and high-fashion," Zhu Xiaodong, Chairman and CEO of China Investment, an Italian-based company designed to channel Chinese capitals into projects in Italy, said in Milan days ago explaining why he invested 70 million euros in "Winter Gardens", a deluxe hospitality facility in the heart of Milan geared to Chinese businessmen and tourists.

"Chinese investors are strongly focusing on Milan," Aldo Cingolani, an architect and CEO of Bertone Design told Xinhua.

On Friday, Cingolani accompanied a delegation of Chinese investors to explore properties in Milan that Bertone Design will help to redevelop in 300-400 service apartments with a planned investment of 200-300 million euros.

"Also thanks to the ongoing world exposition in Milan, they have discovered a lively and international city which is also hosting a growing number of Chinese important companies with their management. They wish to start the project by the end of this year," Cingolani went on saying.

Andrea Faini, CEO of World Capital, a Milan-based company specialized in real estate consultancy and investment, and member of the council of the Italy-China Chamber of Commerce, confirmed to Xinhua increasing Chinese requests for real estate deals in Milan at around 30-40 million euros.

"Market is moving quickly, in particular as regards residences and the hotel sector," he said.

"Chinese investors see Milan as a capital of fashion, food, industry and business, but also a pleasant and comfortable city, easy to reach and with an international spirit," Faini highlighted.

"From our point of view, Chinese investors are bringing a particularly interesting element of innovation for the development and growth of Milan," Marco Dettori, Chairman of Assimpredil Ance, an association that represents construction companies in and around Milan, told Xinhua.

China's investments into the Milan market, Dettori stressed, are a valuable occasion for many local companies that are recovering from a 10-year-long economic crisis and are eager to become a reference point for valuable projects.

"I often tell everybody that we not only should not be afraid of such a flow of capitals, but should welcome them as a great opportunity," he stressed. (1 euro = 1.09 U.S. dollars)