Unicredit Completes EUR 1.1 Billion Sale Leaseback of Banking Properties in Italy

PropertyEU - October 5, 2009

Italian bank Unicredit has sold EUR 1.1 bn of property assets in two separate transactions in a bid to boost liquidity. The Milan-based lender is 'looking to reduce its property holdings from EUR 8.8 bn at present to around EUR 6 bn in the next two to three years,' Unicredit's Deputy CEO Paolo Fiorentino told Italian media during a press conference held to present the operation.

Unicredit has disposed of 13 properties for a total of EUR 574 mln, consisting of EUR 230 mln of equity and EUR 344 mln of bank financing. The assets, which have been sold to an investment vehicle managed by Italian fund manager Ream SGR, include trophy buildings such as the Milan headquarter of Banca di Roma in Piazza Edison and the head office of the former Credito Italiano in Genoa's Via Dante. The majority of the buildings will be leased back to Unicredit with rental contracts of six and 18 years. The bank realises a capital gain of EUR 110 mln through the transaction, it said.

The fund, with a life of 15 years, is targeting annual returns of 11%. It is 35%-controlled by several institutional investors including Fondazione Crt while Unicredit holds a further 35%, which it committed to sell by the first half of 2010.

The Milan-base lender is selling a further 179 properties in a EUR 530 mln sale and leaseback with fund manager Fimit. The properties will be transferred to Fimit's Omicron Plus fund, which was launched at the end of 2008 in tandem with the purchase of a first tranche of Unicredit properties for EUR 800 mln. The properties are fully let to the Italian bank with rental contracts of 18 years, with an option for a further six years. The operation results in capital gains of EUR 163 mln for Unicredit.

Finally, Unicredit has announced the sale of 3,200 units in the Omicron fund to Singapore's sovereign wealth fund GIC Real Estate for a total of EUR 78 mln. After the disposal, the Italian bank will have completed the sale of all its units in Omicron Plus. Sphere: Related Content