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Cromwell European REIT’s office property in Milan largely completed, 70% leased

Felicia Tan
·2-min read

The building is left with three floors to let.

Cromwell European REIT’s (CEREIT) Nervesa21 office development in Milan, Italy, is largely completed and has been pre-let to three businesses, Universal Music, Scalapay and Edelman. As such, the building is now 70% leased, with just 3,000 sq ft or three floors left to let.

Nervesa21, which is located in the Porta Romana district of Milan, south-east of Milan’s city centre, was re-configured to offer 14 modern floors, a modular flexible layout, premium amenities, two rooftop terraces and four panoramic elevators. It is also designed with a strong focus on environmental, social and governance (ESG) with 5,300 sqm (57,048.73 sq ft) of green space, end-of-trip bicycle facilities, 230 parking spaces including electric vehicle (EV) charging stations and more.

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At present, the building is left with minor basement and garden landscape works to complete, with tenant-customers commencing fit-out works.

“We are pleased to welcome the fast-growing fintech company Scalapay and the global communications advisory firm Edelman as new tenant-customers at our Nervesa21 redeveloped office asset. Together with the anchor tenant Universal Music Group, the music label behind Elton John and Lady Gaga, among others, they join CEREIT’s diversified and quality tenant roster of more than 840 companies,” says Simon Garing, CEO of the manager.

“This successful execution is a “proof-of-concept” that occupiers today are increasingly ESG-conscious, focusing primarily on the best quality space with modern staff facilities, good access to public transport and parking and high energy efficiency. Office buildings with these combined features are in undersupply in Europe, as reflected by the approximate 3% vacancy in Grade A buildings in CEREIT’s key cities,” he adds.

“We continue to progress our plans to redevelop other existing assets, providing CEREIT unitholders with an organic pipeline of accretive asset enhancement initiatives (AEIs). As interest rates continue to stabilise, we expect the sentiment to improve across European real estate markets and contribute further growth opportunities for CEREIT,” he continues.

Referring to the independent property valuations for CEREIT as at December 2023, Garing notes that the REIT is “close to stabilisation of European values in this cycle, with an anticipated EUR2.14 ($3.13) net asset value or NAV per unit and net gearing of 38.4% (subject to audit and final board sign-off of the FY2023 accounts).”

“In the meantime, we continue with our commitment to judiciously use further expected divestment proceeds towards capital management initiatives and funding selective accretive AEIs,” he says.

Units in CEREIT closed at $1.41 on Jan 19.

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