Gucci owner Kering buys Milan building for €1.3bn in Europe’s biggest property deal since 2022

n a landmark transaction, luxury conglomerate Kering has secured the acquisition of a prime retail block on Milan's prestigious Via Monte Napoleone for €1.3 billion from Blackstone. The building, located at Via Monte Napoleone 8, houses Kering's Saint Laurent store, as well as Prada and the LVMH-owned Cafe Cova. This deal marks the largest-ever single asset real estate sale by Blackstone in Europe and stands as the largest property transaction on the continent since March 2022.

The acquisition underscores Kering's strategic focus on securing key locations for its luxury brands, with an emphasis on iconic retail destinations across major global cities. This move follows Kering's recent $963 million purchase of a prominent building on New York's Fifth Avenue, adding to its portfolio of flagship assets in Paris, Tokyo, and other key markets.

Luxury retail properties have emerged as a resilient niche amid broader market challenges, attracting significant investment from leading fashion houses. Kering and its rival LVMH were among the top buyers in Europe's largest property sales last year, with LVMH's approximately €1 billion acquisition on the Champs-Élysées in Paris leading the pack. Prada also made headlines with its $425 million purchase of its New York flagship store in December.

Via Monte Napoleone ranks among the world's most prestigious shopping streets, commanding the second-highest rent globally after Fifth Avenue in New York. Blackstone acquired the Milan property as part of its 2021 acquisition of Reale Compagnia Italiana, a private Italian firm with diverse real estate holdings in the city.

James Seppala, head of European real estate at Blackstone, highlighted the exceptional demand for high-quality real estate in prime markets, reflecting the ongoing pursuit of premium retail locations by luxury brands. The Milan deal underscores the growing competition among industry leaders to secure coveted real estate assets, further consolidating the dominance of major players in the luxury retail landscape.

Despite recent challenges, including a profit warning from Kering due to weakening demand at Gucci, the conglomerate remains committed to strategic investments aimed at strengthening its brand portfolio and long-term growth prospects. Deputy chief executive Jean-Marc Duplaix emphasized the importance of ongoing investments in stores and real estate to enhance brand exclusivity and drive future development.

As luxury retailers navigate evolving market dynamics, strategic acquisitions of high-profile real estate assets serve as a key driver of competitive advantage and brand differentiation in an increasingly competitive landscape.