(Finance) – “A state that becomes a player and is no longer just a spectator” in enhancement of the huge public real estate Italian, because he is capable of building market friendly operations that align its risk and return profiles with those of the large foreign funds it wants to attract. This is, in short, the philosophy he is adopting Invimitthe SGR of the Ministry of Economy and Finance (MEF) which aims to enhance public real estate assets, under the guidance of the CEO Joanna Della Posta.
“Invimit acts on national strategic priorities: birth rate, human capital, assistance to the elderly, proximity to the territory and the attraction of investments. This implies intervening on social housing, student residences, senior living, structuring operations with the territories so that they have the liquidity and services they need”, explains the manager, recalling the importance of attract investment to “get additional resources to the country”. It is – he underlines – about “Very Valuable Resources” which ensure aeconomic sustainability over time and also the reduction of the public debt” thanks to a “virtuous circle” that is generated.
These are particularly intense weeks for Della Posta and its team – just under 50 people – already being open the windows to collect the expressions of interest of the two new projects launched by Invimit.
The first project, called “takeover bid” for inspiration for the mechanism of the Public Purchase Offer of the stock exchange, it aims at thepurchase of public buildings by local authorities and central administrations to create student residences capable of guaranteeing 5,000 beds nationwide. The SGR intends to acquire ownership of them, candidates for obtaining the resources envisaged by the PNRR and concentrate them in a single real estate fund, overcoming the issue of asset fragmentation which limits their scalability by institutional investors.
The nominations, whose deadline is set for August 4th, are starting to arrive. “The feedback from the territories is very positive – says Della Posta – Also because we present ourselves with an important track record. Today we have 13 shareholders, of which 2 are essentially private and 11 public. When I arrived these funds distributed 6 million euros and now we have 407 million euros of distribution. The territory understands these numbers very well, it understands that it is a success story and therefore it is following us”.
The other major project, called “Virgil”sees Invimit engaged in the search for a co-investor for the initiative recovery and enhancement of “Piazza D’Armi” in Milan, an asset of approximately 388,000 m2. The project involves the development of approximately 135,000 sq m of gross building area and the construction of one of the largest urban parks of Milan, which will cover 75% of the area. The asset will be contributed to a newly established fund, the majority of which will be sold to a selected investor (or several investors in a club deal), while the remainder will remain the property of a fund headed by the MEF.
“An important project” defines it the CEO of Invimit, according to which “the real innovationbeyond regenerating the territory, is the structure. We plan to close the investor deal with him State which remains a shareholder and, if this happens, let’s all take a step forward, because at the end of the life of this project, the State could also request, for its share, a return, not cheap, but in square meters; therefore, houses or offices for the emergency that we have, which is not just housing, in addition to the share of social housing that is normally developed”.
The company has extended to 30 September 2023 the deadline for the submission of expressions of interest (previously set for 24 July) and is negotiating with real estate-focused global private equity firms and sovereign wealth funds, also because the site value at the end of the planned investment is estimated at 1 billion euros.
Della Posta highlights the importance of having “one State that becomes player and is no longer just a spectator”, showing proactivity in approaching potential partners and investors. “This is a narrative that is very important internationally and is well received by investorsbecause they finally see one Protagonist state who takes on the risk together with them, what the Americans call “skin in the game”. This is an important message, so much so that we have been opening the data rooms for a few weeks now and we already have over 20 global investorswith most also having more than $100 billion invested worldwide.”
“We are in a pre-funding period – added the manager – and we intend to package the operation by listening to investors, to make this project increasingly market friendly”. “Investors are really appreciating our model”, underlined the CEO of Invimit, explaining that this model can be replicated in other Italian cities where Invimit has important assets, such as Bologna and Venice.
The goal is also build a model which allows Italy to step forward in this type of operations and also attract operators who don’t have our country on their radar. “There are global private equity firms that have Italy among the countries in which they will invest and also perhaps have a target of several billion, which is therefore important – explains Della Posta – Just as, alas, there are countries and sovereign wealth funds that do not have Italy among the target countries, so this should make us reflect because we have nothing to envy other countriesHowever, if Paris manages to transact 15 billion and all of Italy makes 12 billion, then we must also ask ourselves why a country like ours is unable to attract the same investments. We are therefore working to fill this gap”.
According to Invimit’s number one, the goal “should also be to sign up on a front door and then, by working well, being reliable and demonstrating our skills, have access to other forms as well of support and investment”. The manager is sure that this pro-active model “it definitely should be also declined in other sectors and it really should be part of a larger strategy“.