Hines has committed an €80 million investment to create a new 16,000 square meter student housing scheme in the former Manifattura Tabacchi area in Florence, on behalf of the Hines European Value Fund (HEVF 2) Italy D fund, managed by Prelios SGR.
The Manifattura Tabacchi regeneration area is strategically situated in the northwest corner of Florence, just 10 minutes from the historic centre and the Santa Maria Novella station, and 15 minutes from the airport. The area will benefit from the new T4 tram line which, by the end of 2024, will link the Manifattura Tabacchi area to the centre of Florence, shortening commute times to just a few minutes and offering enhanced access to all of the services that the city has to offer.
The wider regeneration area was conceived in 2016 by way of M.T.- Manifattura Tabacchi S.p.A. a joint venture between PW Real Estate Fund III LP, a fund managed by Aermont Capital, and by CDP Immobiliare – a company of the Cassa Depositi e Prestiti Groupextends. Spanning 110,000 square meters in total, the former industrial area is being redeveloped through the construction of shared spaces, co-working hubs, cultural areas, offices, apartments, and a hotel, representing one of the most significant urban regeneration projects in Italy.
Closed for twenty years, the project HEVF 2 has acquired is situated within the Manifattura Tabacchi regeneration area and consists of a rectangular block with three structural bays built between 1954 and 1956 carrying a modernist style. Originally used as a sales warehouse, it will be completely reimagined, including new student housing to accommodate more than 400 students. A fifth floor will also be constructed to expand the space available to students with additional rooms and shared common areas. Upon completion in 2024, the project expects to achieve LEED Gold certification ensuring it is designed and completed in accordance with the highest international standards of environmental sustainability and energy efficiency.
The whole regeneration area, which also involves the Superintendency for Architectural Heritage and Landscapes in the province of Florence, aims to preserve the industrial spirit of the historic architecture using contemporary construction methods that are capable of retaining and reflecting the historic significance of the area.
Reflecting the attractiveness of Florence as an international student destination, it has been chosen by more than 40 global universities as its Italian base. As such, it is the city with the highest number of American universities outside of the United States. Its appeal is heightened by Polimoda, ranked among the ten best fashion institutes in the world, which opened its third location in the Manifattura Tabacchi area in January 2020, and welcomes approximately 2,000 students from more than 70 countries each year. Furthermore, in February 2020, the Florence Academy of Fine Arts moved part of its activities to the Manifattura Tabacchi area, and since March 2020 the Istituto dei Mestieri d’Eccellenza LVMH (IME) is also operating from the area to organise and coordinate international professional training courses.
”Thanks to the extensive experience it has acquired in the living sector, Hines will contribute its international and local know-how to the realisation of this project and the wider Manifattura Tabacchi urban regeneration project, while also expanding its student housing presence to Florence, a city with more than 65,000 students, of which c20% are foreign,” said Hines.
Paul White, Senior Managing Director and HEVF 2 Fund Manager at Hines, said: “We are very pleased to have committed an €80 million investment to create a new student housing scheme in Florence. This marks our first investment in this sector on behalf of HEVF 2 and the asset was acquired off-market showcasing our deep market knowledge, the strength of our European platform and, of course, our access to high quality assets. It is in keeping with our conviction in the wider living sector and specifically that the student accommodation market will continue to attract institutional capital across Italy. The wider Manifattura Tabacchi scheme is one with fantastic potential for a mix of uses, and we expect this to have a beneficial impact on our investment over the long-term.”
“We at Hines are extremely satisfied with this investment in Florence, and it once again demonstrates our commitment to the expanding student housing sector throughout Italy,” stated Mario Abbadessa, Senior Managing Director & Country Head of Hines Italy.”We firmly believe that the creation of quality experiential spaces for students, will positively contribute to the evolution of a city like Florence. This project represents the third real estate project in Florence for Hines, after investments in Tornabuoni and Corso Italia, confirming Florence’s ability to attract international investors and its significance as a cultural hub. The project represents another significant step in the transformation of the city and we’re proud to be a part of it.”
“We look forward to working with Hines on Manifattura Tabacchi, their investment confirms the attractiveness of the project and of the city of Florence to the highest quality institutional investors. For Manifattura, Hines is the perfect investor, one that brings to the site a great wealth of experience and that shares our ambition of creating a new, contemporary, sustainable centre in Florence, which can complement the historic centre, in which students, artists, makers, and young creative minds can contaminate one another and innovate. This partnership, after the one with Polimoda, exalts the role of education as a force for urban regeneration, and contributes to strengthening Florence’s status among the world capitals of culture and education,” Giovanni Manfredi, CEO M.T. – Manifattura Tabacchi S.p.A. and Managing Director at Aermont Capital.
Marco Doglio, Chief Real Estate Officer of the Cassa Depositi e Prestiti Group, underlined the operation as follows: “We are particularly satisfied with the Florence initiative in a JV with Aermont Capital and shared with the Municipality, because it corresponds to our vision of urban regeneration as a generator of impact for the territory. At the former tobacco factory, we are delivering a project that can become a model of best practice that brings together the original identity of the place, the architectural value of the area, and the economics of the necessary investment. The transaction concluded today with Hines is fully consistent with the recently presented CDP Strategic Plan, which focuses precisely on the functionalization of properties for the purposes of Social, Senior and Student housing.”
Hines has been assisted by DLA Piper, BIP – Studio Belvedere Inzaghi & Partners, Pro Iter P&CM, EY, Yard Reaas Group. Progenia S.p.A. served as the advisor on the project on behalf of M.T. – Manifattura Tabacchi S.p.A., the Greenberg Traurig Santa Maria Legal Firm and Maisto and Associates.
