Banks club together to provide €216m to new Italian REIT

A club of four banks has provided a total of €216.3 million of finance to the recently-launched listed Italian real estate investor Coima RES, which will in part fund its maiden purchase of the bulk of Vodafone’s Milan office complex.

The financing was provided by Italian banks Banca IMI and Unicredit as well as French bank BNP Paribas and Dutch bank ING Real Estate Finance.

Coima RES debuted on the Milan stock exchange in May, becoming the first real estate company IPO in Italy since 2006. The firm raised €215 million from European and US institutional investors. The REIT has an initial portfolio of 96 Deutsche Bank retail bank branches located in Italy, plus three office buildings within the Vodafone Village complex in Milan, the telecommunications company’s Italian headquarters.

The offices at Vodafone Village were bought last month for €200 million, plus VAT and taxes, in a deal which was subject to the firm’s successful IPO.

The financing by the four banks comprises a €172.2 million senior debt facility, which will fund Coima RES’s investment strategy, plus a €44 million facility aimed at funding the VAT costs of the Vodafone purchase. The senior facility is priced at 180 basis points over three-month Euribor, while the VAT facility is priced at 150 bps.

The Vodafone Village deal was funded with €100 million of the proceeds of the IPO, plus €148 million of the senior loan, including the €44 million VAT facility.

The three buildings at Vodafone Village have a combined area of 61,857 square metres. The overall complex comprises five buildings covering 89,030 square metres. The offices are leased to the Vodafone Group until January 2027, with automatic renewal for six years. The assets produce gross rental income of €13.84 million.

Under the terms of the agreement, Coima has a pre-emption right to buy the remaining two buildings at Vodafone Village, which can be exercised before the end of 2019.

“Following the IPO closed 13 May 2016, the completion of the acquisition of the buildings of the Vodafone Village is Coima RES’s first investment, in line with the terms and timing planned, with a passing yield of 6.9 percent,” said Manfredi Catella, CEO of Coima RES.