First Atlantic Real Estate is in exclusive negotiations to acquire the historic Rinascente building located in Milan's Piazza Duomo for EUR 460-480 mln, representing a yield of 5%, well-informed market sources have told PropertyEU.

The Italian fund manager has emerged ahead of other bidders including Sorgente in the competition to acquire the flagship property controlled by the Retail & Entertainment fund, which is managed by Prelios (formerly Pirelli Real Estate) and is owned by Prelios together with Investitori Associati, Deutsche Bank's RREEF and the Borletti family.

First Atlantic, which is in the process of finalising its merger with Fimit, is making the offer on behalf of its Ippocrate investment fund.

The owners of the Rinascente building, Investitori Associati (46%), Deutsche Bank (30%), Prelios (20%) and Borletti (4%) bought it in 2005 from Ifil, the investment vehicle of Italy's Agnelli family. The Milan retail asset generates around EUR 22 mln in annual rents.

The company is also understood to be in talks to buy the Rinascente property at Via del Tritone in the Italian capital for a price of around EUR 260-270 mln.