Italy: the aim is to replicate the performance

June 2022

"We arrived on the Italian market with the aim of replicating the performance and types of investments made in the Czech Republic and Poland, where Zeitgeist manages over EUR 800 million. We would like to help German institutional investors to invest in the Italian market ”, explains Filippo Bianchini-Scudellari, co-founder and CEO of Zeitgeist Asset Management Italy. Interview by MAG Magazine.



Speaking with Filippo Bianchini-Scudellari: “We have different customers and targets. Our focus is on residential constructions, including social housing, mainly in cities in central and northern Italy.”

Foreign capital is searching for investments in real estate in ITALY. We have recently established Zeitgeist Asset Management Italia, as a result of the joint venture between Zeitgeist Asset Management and entrepreneurs Filippo Bianchini-Scudellari and Sebastiano Canessa, both with strong experience in Italian real estate.

"We arrived on the Italian market with the aim of replicating the performance and types of investments made in the Czech Republic and Poland, where Zeitgeist manages over 800 million euros. We would like to help German institutional investors to invest in the Italian market ”, explains Filippo Bianchini-Scudellari, co-founder and CEO of Zeitgeist Asset.

What is the real estate target that most matches with your investments and what kind of returns do you usually expect for investors?

We have different customers and targets. Our focus is on residential constructions, including social housing, mainly in cities in central and northern Italy, in addition to office buildings and urban development. In terms of return on investment, the institutional investors – which we work with - are looking for a return with a very low risk profile. On the other hand, non-institutional clients are more opportunistic and seek much higher returns.

In addition to German investment funds, are you also open to Italian funds and other types of investors? If so, which ones?

We are an asset management company open to all clients who want to work with us, the institutional ones and the others. The German pension fund which has a stake in Zeitgeist company does not have exclusive right but the first look right. All real estate transactions that we find interesting are offered firstly to the fund, which gives us feedback in two weeks at the latest. In case it is not interested, we are free, of course, to propose the transaction to other investors. At the moment, we are already working with Italian funds and family offices.

What is the identikit of your typical customer?

The participation of an important German pension fund in Zeitgeist defines by itself the identikit of what our customer model could be: it is a subject interested in transactions with a long-term time horizon and with a very low risk tendency. In any case, in general, we are open to collaborating with all customers who wish to approach the Italian market and rely on an asset management company accustomed to operating in different markets and to collaborating with institutional clients from all over the Europe.

Italy often struggles to attract foreign capital when it comes to investments in innovative businesses and startups. Why, on the other hand, is the phrase "made in Italy" considered a safe investment?

Even if we are in a very difficult phase of the market, right now, the real estate market in Italy is still a safe investment. The variables that have impact on this equation are uncertainty for the future, rising rates, inflation and difficulties in financing: all variables that complicate the equation. What makes the real difference is the ability to manage. This is why targeted purchases and creation of value for the investor are our strengths, and allow us to look to the future with reasonable serenity.

Have you already closed some projects in Italy or do you have interesting ones in the pipeline?

Zeitgeist has already completed the first transaction in Italy for the purchase of an office building in Rome, located in the Colli Aniene district, which underwent a complete renovation in 2019 and is currently leased to a large leading company in Italy in providing companies with integrated cloud and fiber optic solutions. Furthermore, we are analyzing two major residential construction projects in the Milan periphery and a hotel in Rome with over 300 rooms.

What is the average investment you usually aim on? Do you plan to keep the same criteria in Italy too?

The fund focuses on operations above 15 million euros, although several times it has carried out smaller operations, perhaps to be developed, or with high Capex. The other clients we work with have no problem making smaller investments, especially if they are opportunistic. Considering that the model has worked in the countries where we have operated so far, we aim to use the same criteria in Italy as well.

Real estate for urban logistics is growing at an interesting rate in Italy too, following an expanding phenomenon in other European countries as well. Do you think it could be a sector with interesting investment margins more than the classic type of commercial or office properties?

Logistics is certainly an interesting asset class, but we have the impression that current yields are still too low. We are able to find much more attractive returns on different segments with similar risk profiles. Today, investing in logistics seems to have become almost a fashion, and this has affected prices, which in our opinion have grown excessively compared to the real value of these assets.

Despite the crisis, the outflow from post-pandemic cities and a price that is in some ways "dependent" to the market, especially in large cities, does Italian real estate still have great international appeal? What potential do you see for a foreign investor?

Certainly, making real estate investments in our country is not easy. There is a long list of foreign investors who have lost a lot in Italy. Someone thought it was just a financing problem, others were simply misadvised or mismanaged. Zeitgeist's goal is to become a reference point for foreign investors in Italy, especially German ones, but not only. We are in no hurry to grow and we want to bring concrete results for our customers. We have a long-term strategy and the Italian market offers enormous potential: the RRF, investments in infrastructure, the restart of Rome are all incredible opportunities that we intend to take full advantage of.

In your opinion, what is the most substantial difference between Italy and Czech Republic or Germany?

The main difference between Italy and the other markets in which we operate is that our country is facing a potential phase of great expansion, while the markets of other countries - such as the Czech Republic, or Germany, thanks to reforms carried out by the Agenda 2010 - have already grown tremendously and have almost completely exhausted their growth potential. Italy, therefore, for an investor has, on paper, greater and more interesting opportunities than markets that we can now consider towards the stage of maturity.

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