Bizzi & Partners buys Santa Giulia from Lendlease

A signature in the Italian night when in Australia it was already daylight decreed the transfer of the Santa Giulia area, in Milan, from Lendlease to Bizzi & Partners, a real estate development company headed by Davide Bizzi. The operation, reported about three months ago exclusively in Il Sole 24 Ore (see the issue of 10 March), was closed in the last few days after the Australians, for months and months intent on leaving Italia and Europe with the exception of London, assessed as adequate the offer made by Bizzi & Partners.

The area is one of the largest real estate developments in Milan, started in 2004 and not yet completed. The total area that can still be built on is approximately 385 thousand square metres, of which residential for over 277 thousand square metres, for a total of 3 thousand flats, retail for 59 thousand square metres, offices for 30,657 square metres, and finally hospitality for the remaining 17,500 square metres, as well as 200 thousand square metres of green space. The total development costs (including urbanisation and land reclamation) would amount to 1.8 billion.

Lendlease thus chose to take a loss in order to complete its exit from the transaction. The Australian group announced the sale agreement in a statement, along with the timeline of other transactions being finalised. The transaction, according to the note, has a gross value of approximately AUD$250m, approximately EUR154m, including the acquisition by the buyer of Lendlease's shares in the Heartbeat Fund (holder of the development rights to MSG North) for a cash consideration of approximately AUD$90m after tax, as well as the assumption of project debt of approximately AUD$160m, in addition to the financing of future reclamation and infrastructure works. "The sale will be made at less than book value and is expected to result in a post-operating loss of approximately $175 million, which will be recognised in the 2026 fiscal year," the release reads.

The story of Milano Santa Giulia began in the 2000s with Luigi Zunino and has come down to the present day amidst reclamation and troubled works, changes of ownership and completed buildings.

The project still to be developed has a total lead time of eight to nine years and the complete development will be carried out in lots. The reclamation and urbanisation will take four years to complete, while the already reclaimed areas will be developed in approximately four years, with the result that the completion date for the last lots will most likely be 2035.