Real estate manager Savills Investment Management has launched a fund to be managed on behalf of CONAD, the largest consortium of independent retailers in Italy, and insurance company Gruppo Cattolica Assicurazioni.
The Mercury Fund is structured to allow three CONAD cooperatives to sell and lease back retail properties worth a combined €300m across central and northern Italy on long-term leases. This will enable CONAD to focus on its core retail activities in Italy, accelerating the growth that has characterized its strategy in recent years.
The fund consists of three sub-funds (divided as per the assets of the three co-operatives), each managed by Savills IM SGR, Italy’s subsidiary of Savills IM, with over €2bn of assets under management.
The fund meets the investment objectives of Gruppo Cattolica Assicurazioni in an era of low interest rates, ensuring stable dividends over a long term horizon. Each of the three CONAD co-operatives possess a 49% stake in each of their sub-funds, with Gruppo Cattolica Assicurazioni holding the remaining share of 51%.
A preliminary loan of €170m has been granted to the fund by the two Italian banking groups, Banca IMI (Gruppo Intesa) and Unicredit.
“[The fund] represents a significant milestone for our activities in Italy, which traditionally were focused on the development of initiatives aimed mainly at foreign investors in the Italian market,” said Giuseppe Oriani, managing director of Savills IM SGR.