The Real Estate Portfolio

The year 2020 saw the completion of the Corso Como Place development project, which was delivered to the tenants Accenture and Bending Spoons in January 2021, and the completion of the sale of a portfolio of bank branches and of the Telecom Portfolio, in line with the strategy of COIMA RES aimed at concentrating on quality office properties in qualified neighbourhoods of Milan.

Matteo Ravà

Head of Asset Management, COIMA SGR

COIMA RES owns a portfolio of properties valued at Euro 688.3 million (real estate assets accounted for on a pro-quota basis), characterized by an EPRA Net Initial Yield of 5.1% and by an EPRA Topped-up Net Initial Yield of 5.3%.

Geographically, 91% of COIMA RES’ portfolio is concentrated in Milan (53% in the district of Milan Porta Nuova and 39% in other districts in Milan), 4% in Lombardy (ex-Milan) and 5% in other regions of Northern and Central Italy.

From an end use point of view, the COIMA RES portfolio is focused for 87% on the office segment (also including the Pavilion asset), for 4% on the hotel segment and for 10% on the bank branches segment.

The properties are held both directly and through subsidiaries and funds. In particular, COIMA RES deploys joint venture structures in order to access also medium to large size projects managed by the COIMA platform with minority interests.

COIMA RES' portfolio is characterized by a low vacancy level (EPRA Vacancy Rate of 2.5%), which is mainly concentrated on three vacant bank branches and on a marginal portion of the Monte Rosa property which is vacant. The Corso Como Place project is not accounted for in the EPRA Vacancy Rate calculation as, whilst the renovation works are now completed, the property was not yet formally delivered to the tenants as of December 31st, 2020.

The COIMA RES office buildings in Milan are situated in various districts of the city. The main sub-group is represented by the buildings located in the Porta Nuova district, where 5 properties are situated (Gioiaotto, Corso Como Place, Pavilion, Tocqueville and Microsoft) which make up approximately 53% of COIMA RES’ portfolio. The other 4 office buildings are situated in secondary districts, in particular the Lorenteggio district as regards the Vodafone complex, the Bicocca district as regards the Sarca building (which hosts the Philips headquarters), the Lambrate district as regards the Deruta property and the City Life district with regard to Monte Rosa.

All COIMA RES office buildings in Milan are well connected to the public transport system and to the Milan subway network. In a market environment in which tenants are proving to be increasingly demanding as far as their real estate choices are concerned, the investment strategy of COIMA RES favours properties capable of achieving, immediately or through renovation, high energy and environmental performances, also proven by obtaining the highest certification standards (for example, the LEED protocol). The COIMA RES portfolio is characterised by assets with different profiles, in particular:

properties leased with medium-long term contracts already in the stabilised phase, where the rental growth is mainly linked to inflation or contractual step-ups and / or achieved on the back of re-letting of space (where new lease agreements can be stipulated at premium level compared to previous leases)

properties characterised by lease agreements with short residual duration, where, upon expiry of the existing lease contracts, renovation works are expected to be carried out and where at the back of these processes it is possible to reasonably assume the stipulation of lease agreements at higher levels compared to the previous ones

vacant properties, where a refurbishment plan is being implemented (or being delivered to the tenants on the back of refurbishment plans already finalised)

In a market environment in which tenants are proving to be increasingly demanding as far as their real estate choices are concerned, the investment strategy of COIMA RES favours properties capable of achieving, immediately or through renovation, high energy and environmental performances, also proven by obtaining the highest certification standards (for example, the LEED protocol).

OVERVIEW OF THE REAL ESTATE PORTFOLIO

Portfolio 688
Euro million
(pro-quota basis)
Porta Nuova 53%
EPRA net
Initial yield
5.1%

Offices 87%
LEED
certified
>66%
EPRA topped-up
Net initial yield
5.3%

Milan 91%
WALT 4.3
years
EPRA
Vacancy rate
2.5%

END USE
End use
GEOGRAPHY
Geography
PROFILE
Profile
CERTIFICATION
Certification

The COIMA RES office buildings in Milan are located in various districts of the city, the main subgroup is represented by the buildings located in the Porta Nuova district, where 5 properties are situated (Gioiaotto, Corso Como Place, Pavilion, Tocqueville and Microsoft) which make up approximately 50% of COIMA RES’ portfolio. The other 4 office buildings are located in secondary districts, in particular the Lorenteggio district as regards the Vodafone complex, the Bicocca district as regards the Philips headquarters, the Lambrate district as regards the Deruta property and the City Life district with regard to Monte Rosa.

All COIMA RES office buildings in Milan are well connected to the public transport system and in particular to the Milan subway network.

Main metrics of the Real Estate Portfolio as of December 31st, 2020

  Office assets in Milan Porta Nuova Office assets in Milan (other districts) Non-office assets Total
  Microsoft Corso Como Place Pavilion Gioiaotto Tocqueville Vodafone Monte Rosa Sarca Deruta Filiali Deutsche Bank
Location Milan Porta Nuova Milan Porta Nuova Milan Porta Nuova Milan Porta Nuova Milan Porta Nuova Milan Lorenteggio Milan CityLife Milan Bicocca Milan Lambrate Various -
Address Viale Pasubio 21 Via Privata Nino Bonnet 6/a & 10 Piazza Gae Aulenti 10 Viale Melchiorre Gioia 6/8 Via Alessio di Tocqueville 13 Via Lorenteggio 240 Viale Monte Rosa 93 Viale Sarca 235 Via Deruta 19 n.a. -
End use Office Office Office, Events Centre Office, Hotel Office Office Office Office Office Bank branches -
Commercial surface (sqm) 10,773 23,574 3,576 14,545 9,604 42,039 19,539 17,611 26,012 26,776 -
Strategy Core Value-add Core Core Core +/
Value-add
Core Core +/
Value-add
Core Core +/
Value-add
Core -
Construction year 2016 Years 1950’s 1960’s 2014 Years 1960’s 1969 2012 Years 1940’s 1950’s 1960’s Years 1980’s 2007 - -
Year of last refurbishment - 2020 - 2014 2003 - 1997 2017 - - -
Ownership (pro-quota) 84% 36% 100% 88% 100% 50% 100% 78% 100% 100% -
Gross Asset Value (100%) €99.2m €210.7m €72.7m €82.0m €59.5m €211.0m €60.6m €62.1m €44.4m €66.6m -
Gross Asset Value (pro-quota) €82.9m €75.3m €72.7m €72.3m €59.5m €105.5m €60.6m €48.6m €44.4m €66.6m €688.3m
Main tenants Microsoft Accenture (preliminary lease agreement), Bending Spoons (preliminary lease agreement), Sisal IBM QBE, Angelini Beauty, NH Hotel Sisal Vodafone Techint, PwC Philips, Signify BNP Paribas Deutsche Bank -
WALT (years) 2.9 n.m. 7.1 4.8 1.3 6.1 2.9 5.2 1.0 6.2 4.3
Occupancy rate zero n.m. zero zero zero zero 15% zero zero 5% 2.5%
EPRA Net Initial Yield 4.3% n.m. 4.6% 4.7% 3.5% 6.2% 5.0% 5.7% 7.4% 4.8% 5.1%
EPRA Topped-up Net Initial Yield 4.3% n.m. 4.6% 4.9% 5.2% 6.2% 5.0% 5.8% 7.4% 5.4% 5.3%
LEED certification - - - - -
Architect Herzog & de Meuron PLP Michele De Lucchi Park Associati n.m. Gantes & Marini n.m. Alessandro Scandurra n.m. n.m. -