Expo Milano 2015  › Real estate

Milan Expo concession for the Science Park extended to a maximum of 99 years

by Paola Dezza

Two days of crammed meetings with the real estate investor community in Milan and London has led to a lengthening of the concession for the realization of the “Science, Knowledge and Innovation Park” that should see the light within a few years in the former site of the Milan Expo World Fair, backed by an investment of €1.5-2 billion.

The concession has been extended from the initial 50 years to a maximum period of 99 years, as openly requested by potential investors. It is easy to think that this will involve networks, temporary associations and consortia including all types of competences.

The “Science, Knowledge and Innovation Park” will include the offices of the Human Technopole life sciences research center and the campus of the University of Milan’s science faculty, which are aimed at becoming a catalyst for national and international companies. The project will maintain the surface area of 440,000 square meters.

The call for tenders launched by Arexpo, which owns the ground where Expo Milano 2015 took place, started in mid-January and will involve two steps. Arexpo is owned by Italy’s Economy Ministry (39%), the Lombardy Region and Milan City Council (each with 21%), Fondazione Fiera Milano (16%) Citta Metropolitana di Milano (2%) and Rho City Council (1%).

It is the biggest development project currently on the horizon in Italy, if the capital is found to finance it. The space is over one million square meters close by Milan (of which 480,000 square meters of gross leasable area is for non-earmarked use). In 2015 it hosted the global Expo fair which gave the Lombard capital a boost to compete at the level of leading European cities.

The first step will lead to the definition of a masterplan for the transformation of the entire area, as well as for the drawing up and elaboration of a business plan for its overall development. The second phase will be focused on the activation of the masterplan and the industrial plan for development (planning, construction of works and management of spaces).

The first phase will end on February 28. “On that date we will have the pre-qualification requests from operators,” said Arexpo President Giovanni Azzone. “And we will have 30 days for carrying out the evaluation of the requirements. After that period, interested parties will receive the invitation letter to the tender with indications of the binding conditions,” he said.

The interested parties are numerous. They include pension funds which, having a more ample time horizon, appreciate the choice to take the concession up to 99 years.

Among names circulating in the market as potential investors there are the Australians Land Lease (who are working on the assessment of the Santa Giulia project) and private equity groups such as Blackstone. But sources close to the matter say contacts have also been made with Euromilano, owner of the nearby area of Cascina Merlata where the Saudi Fawaz group have invested.

“Ours is an innovative tender for Italy which aims to maintain a strategic leadership to create a concentrated ecosystem which can be a driver for the country’s economy,” said Azzone.

The project will be developed by Arexpo alongside a financial partner, through a mixed contract that is part contract part concession. The capital necessary for the development has been quantified at about €1.5-2 billion.

What is the time period for the project’s realization? “By the end of the year the structure of the masterplan will be ready,” said Azzone. “This will allow the two significant interventions of the Human Technopole and the University of Milan to launch tender procedures. The inauguration of these two should occur in 2022, longer times are seen for the completion of the development.”