Investment funds bet on AKNO
Milan as the protagonist
There is no doubt that Milan has changed a lot in recent years: major redevelopment urban works, new projects signed by great international architecture stars and the beginning of new business and cultural initiatives. This rebirth, which finally frees the city from the residues of its industrial past, was possible due to the combination of two factors: the presence of far-sighted public administrations and the arrival of foreign investments.
In this context, the contribution of international investment funds was essential, with its own high financial capabilities, they are always looking for markets in which to achieve the best returns. The data of recent years show how Milan, and Lombardy in general, have been chosen for real estate investments in all sectors: residential, retail, services and even logistics, which is AKNO’s expertise.
The reason for this interest is simply the awareness of big international investors that buying a property in Milan today can get high returns in the short and medium term. Like other European cities, e.g. Frankfurt and Paris, indeed, the attractiveness of the Lombard capital, considered one of the world capitals of design and fashion, guarantees high rental fees and, therefore, safe returns for investors.
In particular with regard to the field of logistics, the one in which AKNO has been operating for forty years, the flow of goods in the Lombard area has always guaranteed a good return for those who decided to invest in a facility of this sector, but the new requirements of the market and the new sensitivity for some issues have also changed the criteria for the construction of logistics parks and warehouses.
We think that the commercial successes of AKNO, which we will discuss in this article, are due precisely to the ability to keep up with the best technologies and constructing buildings of quality, respectful of the environment and simple to manage in a convenient way.
Investment funds from around the world
To assess the current situation of the real estate market in Lombardy, it is very important, in our opinion, to examine the geographical origin of the main funds that have been investing in recent years, also to outline some trends.
The presence of Middle Eastern investors is now stable in the Milan scene and it is linked both to the luxury sector, and, more recently, to the urban redevelopment projects for the construction of office buildings and headquarters. The Qatar sovereign fund has participated, for example, in interventions for the Porta Nuova district and in the acquisition of Palazzo San Fedele, while the Abu Dhabi Investment Authority has acquired the former INPS building in Via Gioia, and the Azerbaijan fund has invested in Palazzo Turati.
Other Asian countries, such as Singapore and China, have also shown a real interest in returns that can be guaranteed by a property in Milan, both in the residential and in the services sector.
However, it is the large US investment funds that take the biggest share of the Lombard real estate market, with big names like Hines, Kkr, Barings, WeWork and many others, including CBRE and Invesco, which purchased our logistics park in Trucazzano in 2016 and the Broni Logistics Park last year.
The characteristics that seem to attract more foreign investors are, understandably, those linked to the possibilities of returns offered by the properties they are buying. To break it down, we can say that the parameters to be considered are two: the extent of the expected future rents and the maintenance and operating costs.
Constructing successful buildings
What are the elements that make a logistics facility a successful building? What drives companies to rent spaces within a specific logistic park rather than another?
AKNO’s forty-year experience has taught us that to succeed in terms of rental requests you must, first, build a facility with indisputable technical qualities. The companies that choose, among different proposals, where to buy or rent a space for their own logistics are always very attentive to the purely technical and structural characteristics of the building. Every detail has to be taken care of in the best way to guarantee full functionality and more versatility of use for all spaces.
Moreover, while focusing on the care of the functionality of the facilities, we must not overlook the aesthetic side and the design, which have a strong influence on the image of the companies that will occupy the spaces of the logistics park. This aspect too, sometimes shamefully overlooked by those who create buildings in this area, helps us to make attractive, and therefore profitable, our Business park.
Finally, the choice of the geographical location is of critical importance. In fact, let us not forget that a logistics park is first and foremost a place of exchange for goods and, as such, the more it is well connected with the main roads and it is central to the places of production and marketing of the goods that pass through it, the more it is efficient.
With due attention to these aspects, AKNO has built both the logistics park of Trucazzano, purchased by CBRE in 2016, and the Broni Logistics Park that Invesco has acquired in recent months, recognising how the quality of our facilities is a guarantee to get a good return starting from safe and suitable rental fees.
Whoever intends to buy a logistic, commercial or industrial structure must not, evidently, only think about how much it will be able to get by renting the spaces, but also to take into due consideration the costs that it will have to sustain for its management.
Beyond the tax charges, on which we builders have no control on, the costs of maintaining a logistics park depend a lot on the project choices carried out and the care taken in the construction of the facilities.
For example, it is clear to everyone that the choice of high-quality materials and careful implementation of all systems reduces dramatically the net costs for ordinary and extraordinary maintenance, making it even easier to plan and monitor their trend.
Similarly, all the technician precautions that lead to Energy saving in terms of heating and air conditioning of the rooms, as well as artificial lighting, are not only an important contribution to the protection of the environment, but also significantly affect management costs.
The care for the design and construction of its business parks have made AKNO a successful partner for international investment funds that have decided to bet on Italy, and this represents an important recognition for the quality of our work.