Appunti di Financial Management of Real Estate Transactions + Project Management

Financial management of real estate transactions

Remember: the role of finance is becoming more and more relevant - not only in a traditional way (like mortgages, project finance) but also in other ways as real estate funds, SIIQ, or the formation of spin-off or sale and leaseback.

Lezione 1 - Real estate cycle

Real estate sector & companies

The pillar where everything happens from the construction to the management. A big revolution was the introduction of management in the construction fields.

Financial management of real estate transactions

Remember: The role of finance is becoming more relevant - not only in a traditional way (like mortgages, project finance) but also in other ways as real estate funds, SIIC or the formation of spin-off or sale and leaseback.

Real estate cycle

Real estate sector and the property companies. The pillar where everything happens from the construction to the management. A big revolution was the introduction of management in the construction field. When we speak about real estate, we speak about management.

Real estate sector -> A chain (commercialization, typical and future) with residential homes, ground property to management that reproduces the properties to manage this process while real estate sector is a cycle and doesn't flourish. It's a long-> a cycle. In Italy, we are more constructed on the redevelopment of assets. The big revolution is concentrated in two aspects:

• Management aspect
• Financial tools

Facility manager

Able to manage the building in the best way as a coordinator, having an overview of all the buildings and able to anticipate problems.

Property manager

Concentrated on managing the value and the productivity of the building. He has contact with the tenant, so the value of the building. Each of them has its own core business -> their core business is not to manage assets/buildings. Ex. owning companies core business -> manage money.

Real estate companies

They only manage.

Property companies

They have owned. Sometimes they are managing in some others they not.

Examples of property companies

• Covivio: One of the biggest property companies in Europe that has the capacity to reuse and to manage a real estate investment operation. Originated in France and Italy.
• Coima: Italians originally originated in the past and they were visionaries. They had the possibility to go around the world and transform companies. Same strategies to apply to Milan.
• Generali Real Estate: France and Italy mainly (and Europe). Owner of City Life -> The three skyscrapers are destined to Generali, Allianz, and PwC (and also the residential part). Generali is both the owner and the tenant. Before → This was an exhibition area. One of the biggest rock in real estate operations.

Real estate is not just design → It is also competition

• Architecture design tender

Hines

To finance such a huge project Coima made a joint venture with Hines (and other SGRs). One of the biggest investors was Qatar Holding (40%). One of the biggest companies in the world → They were visionaries.

• Piazza Cordusio - Milan
• Palazzo Aporti Near stazione centrale
• Unicredit Tower: Owner: Qatar holding. Tenant: Unicredit.
• Starbucks in Milan: Tenant: BlueStone Group

Before Porta Nuova there was a huge abandoned area. Coima and Hines decided to sell everything to Qatar Holding. That, thanks to the big earnings, Coima broke the joint with Hines and created Coima SGR.

Agenzia del Demanio

Italy is more than Milan. There are a lot of culturally significant places that are opportunities to attract the real estate sector and transform abandoned places into very interesting ones and give back them a value (valorize).

Lezione 2 - Financial management of real estate

1/230 Settembre

The real estate market in Italy outlook

Real Estate: a local market (because people who are here want to invest money or who operate in a country to invest has to know the situation). Real Estate investment - generally is a long period, and an investment is a long-term investment.

• Office: Until 2019 was a secure investment (so before formation 2020 there was a high demand for traditional offices, but then the working modality changed a lot in favor of smart work & less secure investment).
• Retail: Big driver in investments.