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Gucci owner Kering SA is spending \u20ac1.3 billion ($1.41 billion) for a property on Milan\u2019s toniest shopping street.\u00a0<\/p>\n
The French luxury group said Thursday that it\u2019s buying Via Monte Napoleone 8 from a unit of Blackstone Property Partners Europe.<\/p>\n
The 18th-century property covers five floors and boasts more than 5,000 square meters of retail space, making it one of the largest on the famed street, according to Kering.<\/p>\n
The building already hosts a location of\u00a0Cova<\/a>, the high-end Italian cafe brand owned by LVMH Moet Hennessy Louis Vuitton SE, as well as fashion label Prada.<\/p>\n Via Monte Napoleone, known as one of the\u00a0most expensive<\/a>\u00a0streets in the world, has an impressive roster of top-end fashion, jewelry and footwear sales locations.<\/p>\n The deal represents \u201cthe single largest asset sale in the Italian real estate market,\u201d said\u00a0Luigi Caruso<\/a>, senior managing director with Blackstone in London, underscoring \u201cexceptional investor demand for high quality real estate in the strongest markets.\u201d\u00a0<\/p>\n Milan\u2019s property sector has seen a renaissance in recent years as revitalization projects have helped transform several run-down neighborhoods into upscale landmark zones.<\/p>\n The announcement Thursday follows Kering\u2019s January\u00a0move\u00a0<\/a>to purchase a building on Manhattan\u2019s Fifth Avenue for $963 million, as luxury retail real estate purchases heat up.<\/p>\n Paris-based Kering, which derives two-thirds of its profit from the Gucci brand, called the Milan investment part of a \u201cselective real estate strategy, aimed at securing key highly desirable locations\u201d for its labels.<\/p>\n The firm said it wants to manage its real estate portfolio with \u201cthe short- to medium-term objective of retaining a stake in prime assets alongside co-investors in dedicated vehicles.\u201d<\/p>\n Kering will only purchase \u201cexceptional\u201d buildings in a limited number of cities if they create value for the group\u2019s labels, Deputy Chief Executive Officer Jean-Marc Duplaix said in February. Kering has about 1,800 selling points yet doesn\u2019t intend to own or co-own more than a handful of key exclusive locations.<\/p>\n Duplaix also said at the time that the company was exploring partnerships with financial funds to become \u201cmore agile\u201d while limiting exposure to real estate. Kering has no plans to become a property developer, CEO Francois-Henri Pinault said at the time.<\/p>\n<\/div>\nSubscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up<\/a> for free.<\/div>\n<\/div>\n