Interview: Urban Living - VC - Italy

I would like to thank Marco Luraschi and il Quotidiano Immobiliare - Daily Real Estate (#1 in Italy for Real Estate) for this interview (English version below by Google Translate, another great technology with Israeli DNA). Marco and his Team have been working incessantly, for over a decade, in order to educate the market about real estate best practices, local and international players, hottest deals, latest news and much more. We surely share the same passion about our work...

GRE looks attentively at the Italian Students

Interview with the Head of Italy Luca Tomesani Melotti

Luca Tomesani Melotti *, manager with a long international experience in the real estate market outside Italy, he explains the targets and objectives of a new investor who arrives in Italy with the ambition of investing in the student housing sector: this is the French group "GRE" Groupe Réside Etudes which is strongly looking for opportunities on the Italian market with an enviable track record in its country.?GRE was born in France in 1989 and today has 2,800 employees in the extended hospitality sector (living, students, senior living).

Dr. Melotti, would you like to explain your decision to return to Italy and invest in the real estate market?

"After analyzing the different industries and asset classes that I believe are of greater importance in the future, I identified the companies that are expanding and with little presence in Italy, and so I arrived at GRE, a European-level group (about 450M euros of turnover in 2019), proposing to senior management to enter Italy ".

The French GRE group is a leader in the student housing and senior living sector, two sectors that have continued to attract the attention of investors even during the pandemic.

With what objectives and which target does GRE want to reach the Italian market?

“A good understanding was immediately created with them, and after analyzing the plan I had prepared for them, they proposed me to become their local partner.?The British say "sky is the limit";?the question shouldn't be how many projects you plan to do but how many projects do you think you will find.?The existing stock in Italy is lacking, land prices and urban planning costs, which for example are higher than in France, make it difficult to identify operations.?That said, we are working on various interesting dossiers with the aim of closing a number of projects per year.?I am convinced that an international group like GRE can add value to the existing offer, consequently increasing the demand for this real estate product.?Finally, I share a significant fact to understand the opportunity that presents itself to us in Italy: the number of students/beds is 25 while in France it is 8, or 3.12X higher ".

Where and "how" does GRE want to invest in Italy?

“Initially we focus on student residences, with a focus on central-northern Italy both in primary cities such as Milan, Rome, Turin, Bologna and in secondary cities for example, Padua, Pavia, Ferrara, Parma.?Student housing projects will also have the function to test the Italian market for senior living, on which we have not yet worked.?In general, we prefer to take over spaces from funds, developers, various owners, signing long-term contracts with international guarantees, but we will not let any acquisitions slip away if they are interesting.?The value of a property or a company is represented by the sum of the cash flows generated and discounted.?If the property does not generate cash flows what is its value??GRE offers a quality alternative, with 30 years of experience in the sector and financial strength ".

Will there be other interesting sectors related to Living?

"It is undeniable that the new trend is represented by co-living, in hybrid home / work spaces and I strongly believe in the concept of" digital nomad ", borrowed from the Tel Aviv friends of" Selina ".?I would like to see "American" residential projects in Italy with many common spaces and services, if I decided to broaden the scope I would focus on such projects with a sales price/sqm +10K Euro ".

Perhaps venture capital is still underdeveloped in Italy : in your opinion which borders can real estate exceed??What is the development of this market?

"First of all some numbers to define the context: in the first semester 2021 VC investments in Italy amounted to $400M, while in Israel, the country where I lived for several years, they were $4.6B (11.5 times higher) and Israel has a population of 8M, about 13.5% of ours;?the Latin cousins, the French, made $ 5.2B in the same period (13 times more) while the Teutonic cousins made $ 8.4B (a multiplier of 21X).?Still, while Tel Aviv has 30 unicorns (including exits), or companies with a higher rating of $1B, Paris has 21, Berlin 19, Milan is not on the radar.?If “the beauty will save the world "I believe it will be the inevitable technological and digital leap that will save Italy.?PropTech is very "hot" abroad, I hope to find many interesting real estate start-ups on my table in the coming years.?Real estate is an industry that needs a breath of fresh air: from the digitization of the land registry and urban planning in blockchain, to the tokenization of real estate assets up to the possibility of using the points earned with the use of credit cards for the deposit on a purchase of a house ... I could talk about it for hours! ".

* Luca Tomesani Melotti returns to Italy during the lockdown (international experience, former Executive Director of Brack Capital Group, an Executive MBA in America), brings Reside Etudes (leader in urban residences in France) to Italy. In addition, Luca is the Chairman of the Committee Investments by Lumen Ventures (first Italian SiS, youngest Team ever approved by Bank of Italy, average age under 30).