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Florence betting on international investments for urban renovation

by Paola Pierotti

Florence is betting on international investments and the redevelopment of state or municpally owned real estate to drive a recovery in the Tuscan capital, after years of suffering due to the economic crisis and the bankruptcy of historic construction companies.

The high-speed train connection has made the city one of Italy’s main hubs and Florence has known how to communicate its many vocations, aside from the cultural, with interesting investments for example from the fashion world.

With the Four Seasons hotel installed in the Palazzo della Gherardesca since 2008, Florence has become particularly appealing again for the hotel industry, and the Lowenstein family recently announced that the CAIRE consortium has won the private contest to relaunch the former Vittorio Veneto barracks and plan the future of the Costa San Giorgio street with a project that will integrate office spaces with tourist accommodation.

The city council is promoting Florence through a national marketing operation, having gathered information into a single database about the large public and private properties that are currently abandoned, with the aim of attracting financial resources and favoring their renovation and conversion. Mayor Dario Nardella’s council is presenting the database to potential investors. It is likely to be updated with the 16 regeneration initiatives that the council and state property agency Demanio presented a few days ago.

“Between ex-barracks, historical buildings and other public property, we estimate a surface of 175,000 square meters with an expansion of 600,000 square meters, property of great beauty and a value of about €360 million, situated from the center to the periphery,” said the Demanio agency.

Some of these involve state holding company CDP, such as the recovery of the San Gallo former military hospital, for which CDP Investments has launched a tender and will choose the project developer by the end of March.

A renewed “dynamism” in the Florentine market has been noted among the leading architectural firms in the city and those who promote real estate development.

“The new urban regulation gave legitimacy to big real estate containers and this is a salient element for international and institutional investors,” said Giovanni Belloni, Chief Executive of real estate developer Progenia. “Finally, after two years, Florence has a clear reading tool for the city,” he said.

The signs? The relaunching of the renovation of the former tobacco manufacturing plant through the joint venture between CDP Immobiliare and an international investment fund of which Aermont Capital LLP is an investment advisor. The project foresees a total investment of €200 million to restore a strategic area of the city based in a complex of almost 90,000 square meters. The process is underway but there is still no defined project.

A year ago, the US group Hines signed a purchasing contract for a 15th century palace in Florence in via Tornabuoni 3: the €80 million deal includes commercial spaces and a hotel structure.

“The project of The Student Hotel is already in an advanced phase,” said Architect Marco Casamonti from the Archea studio, which “with an investment of €40 million is converting the Palazzo del Sonno in an abandoned industrial area into student dorms with 400 rooms.”

The same studio will also design the renovation of the former city theater, where 100 luxury lodgings are due to be developed by the Corso Italia company. They will go on the market with costs ranging between €6,000-€9,000 per square meter. The study led by Casamonti is busy also in the area of Novoli, on four buildings with 100 lodgings on sale at €4,000 per square meter.

Genius Loci Architettura has signed the project for the conversion of the former offices of Cassa di Risparmio di Firenze, in via Bufalini, which will have varied uses including both the residential and commercial, and is about 18,000 square meters of surface space. About 140 luxury lodgings will be created and 100 new car spaces: a conservative restoration operation which aims to put apartments on the market at a figure that is estimated to vary between €4,000-6,000 per square meter. The sole investor is Colony Capital and Idea Fimit is entrusted with the management of the fund.