MilanoSesto

MilanoSesto rendering
Project box

Geographical area: Europe

Location: Sesto San Giovanni, Italy

City size: Small (between 50,000 and 250,000 inhabitants)

Promoter: MilanoSesto S.p.A.

Developer: MilanoSesto S.p.A.

Start year:

End-year:

Implementation phase: Implementation in progress

Project size: Neighborhood

Total area of intervention (in sqm): 1.433.299

Total investments (in USD): 4.3 billion

Project overview

MilanoSesto is a wide-scale regeneration initiative covering an area of more than 1,400,000 sqm in Sesto San Giovanni, a small city on the north side of Milan. The intervention covers a former industrial site, which will be completely renovated into a mixed-use neighbourhood with residential buildings, offices and commercial spaces, and innovative healthcare and research facilities. The industrial site of MilanoSesto once hosted the Falck industrial plants, one of the most important iron and steel production companies in Italy, founded in 1906. The industrial plants were ultimately decommissioned in 1996, and the site has been identified as a unique regeneration opportunity for the Municipality, as well as for the entire Lombardy Region and Metropolitan City of Milan. The MilanoSesto area suffered from high pollution levels due to the chemicals employed by the industry, leading to strongly contaminated soil. Moreover, after the decommissioning of the industrial plant, the site was left completely abandoned, thus representing a critical urban void within the highly populated Metropolitan City of Milan. 

Therefore, the site has long been considered a target for regeneration initiatives, aiming to expand the housing supply and repurpose the area for mixed-use development. The regeneration process began in 2010 when the private company MilanoSesto S.p.A. acquired ownership of the entire site,  which had previously been held by various entities which lacked the commitment and resources to start redeveloping the area. Initially controlled by different stakeholders, MilanoSesto S.p.A. was later fully acquired by COIMA and Redo SGR, taking over from Hines. Following the acquisition, the company commissioned private firms to carry out extensive land remediation, a process funded by the banking group Intesa Sanpaolo. While MilanoSesto S.p.A. retains ownership of most of the land, areas designated for public functions, such as the Health and Research City, are owned by public entities, and the Unione Zero lot was acquired by Hines. Redo SGR and Hines also partnered to develop the project’s masterplan. Finally, the asset management company Prelios Group oversees project and asset management for the development’s private buildings.

The project is financed through a combination of funding sources, totalling USD 3.8 billion. This includes a public investment of USD 493 million, mostly allocated to the Health and Research City. The Unione Zero lot benefits from a USD 548 mil private investment, of which USD 22 million earmarked for public infrastructure and works. The Health and Research City is primarily financed by the Lombardy Region, with additional contributions from the national government and private investors. 

Hines appointed Foster + Partners for the general masterplan, while the train station was designed by Renzo Piano Building Workshop, Ottavio di Blasi & Partners, and SCE Project. Other key architectural firms involved include Antonio Citterio – Patricia Viel for the hotel and Intesa Sanpaolo tower, Park Associati for student housing, Barreca & LaVarra for affordable housing, and Scandurra Architecture Studio for private housing. The site has been divided into 12 lots to facilitate planning and implementation, with construction starting in the Unione Zero lot following land remediation. This lot includes student housing, a hotel, the Intesa Sanpaolo office tower, the Health and Research City,  including the new San Raffaele University campus and a hospital, residential buildings, and a new Railway station. Construction began in 2023 with the train station, followed by the excavation for other buildings.

The other MilanoSesto lots will see the implementation of additional private and affordable housing units, commercial and retail spaces, offices, and industrial and production facilities. The site’s regeneration is expected to generate significant economic benefits for the entire Lombardy Region, enhancing overall spending capacity through the attraction of people and businesses, the creation of new job opportunities, and increased fiscal revenues for the Municipality of Sesto San Giovanni. The project also focuses on providing social and subsidized housing options for new residents, and on restoring the protected historical industrial buildings into community centres, public spaces and cultural venues. Lastly, the neighbourhood represents a frontrunner for the implementation of sustainable communities, as it is expected to significantly reduce carbon emissions thanks to energy efficiency measures, innovative digital infrastructures and the creation of urban parks and green areas.

As a mixed-use neighbourhood, MilanoSesto comprises a variety of land use hosting residential and commercial buildings, offices and hospitality facilities (376,239 sqm), green areas and open spaces (505,139 sqm), road networks and squares (23,499 sqm), aboveground and underground parking (203,995 sqm), schools and educational buildings (39,616 sqm), and the healthcare facilities of the Health and Research City (205,000 sqm). The total gross floor area of 1,002,764 sqm is divided into 601,658 sqm (60%) allocated to residential purposes, and 401,106 sqm (40%) allocated to commercial spaces, offices, hospitality and industrial activities. Specifically, the residential areas are divided between 481,327 sqm for private housing (80%) and 120,331 sqm for subsidized and affordable housing (20%). The commercial areas are split between 100,000 sqm of commercial and retail spaces (25%), 73,312 sqm of offices (18,2%), 54,153 sqm of hospitality facilities (13,5%), and 173,641 sqm of industrial and production activities (43,3%).

Benefits

The regeneration of the MilanoSesto site will bring remarkable benefits in terms of employment. During the 2022-2025 period, the project will provide a total of around 5,310 job opportunities related to the construction sector. In addition, Unione Zero will bring around 2,165 new jobs for the residents, while the Health and Research City will provide around 3,150 new opportunities for researchers, professors, and healthcare professionals. The construction of new commercial and retail spaces and offices in the later stage of the project is expected to bring around 4,800 additional new workers into the neighbourhood. The construction of Unione Zero and the Health and Research City is expected to generate a total economic impact of around USD 2.6 billion considering new investments and job opportunities. 

Lastly, the renovation of MilanoSesto will have an important fiscal impact on the Municipality of Sesto San Giovanni due to the increased taxes from the residential and commercial buildings developed. Specifically, the additional amount of annual taxes is estimated to be around USD 2.9 million, representing around 6.2% of the total annual fiscal revenues of the Municipality. Additional taxes are divided between USD 1.72 million of property taxes, USD 1.08 million of additional waste taxes, and USD 181,000 of higher income taxes.

The development of MilanoSesto focuses on creating a sustainable neighbourhood, reducing its overall environmental impact and improving the wellbeing of the surrounding residents. The project will remediate a total of around 1,400,000 sqm of highly polluted soil, therefore reducing health-related risks for the entire community. The new neighbourhood aims to significantly reduce its resource consumption, ultimately reducing CO2 emissions. The newly developed buildings will be subject to specific energy efficiency standards, which will reduce energy requirements of the entire district by 30%, saving approximately 11,000 MWh per year. The neighbourhood will cover around 40-50% of its total energy consumption with renewable energy, with the train station being self-sufficient thanks to the installation of solar photovoltaic panels on the roof. The resource efficiency measure will also focus on water usage and consumption, as water requirements and consumption of the entire area will be reduced by 30% and 5%, respectively.  Those measures allow for the avoidance of 5,500 tons of CO₂ emissions each year. The reduction will ultimately save around USD 2.3 million for social costs from risks connected to CO2 emissions. 

Besides energy efficiency measures, the regeneration of the industrial site targets the implementation of a vast area dedicated to green areas and urban parks covering a total of around 500,000 sqm. In total, the project is expected to plant around 10,000 trees in the area, with 34 different species identified. The provision of trees and green areas will significantly improve the biodiversity of the area and further reduce the urban heat island effect. In addition, the vast green areas and high number of trees are expected to absorb around 1,000 tons of CO2 per year.

The renovation of the former industrial site will have significant impacts on the local community. The Unione Zero lot will provide 800 new housing units, together with 700 student housing units. On the total housing offer on the lot, 280 housing units will be available for affordable rent, targeted especially to healthcare workers. Affordable housing options provide an important opportunity for lower-income households, as rent prices are expected to be between 39% and 52% lower compared to prices in the surrounding areas and Milan, respectively. The lower rent prices are estimated to generate around USD 10.861 of average annual savings on housing per household, reducing housing expenses for new residents. The affordable housing units will create a mixed-income community, favouring social equity and inclusiveness. 

To further improve inclusiveness, MilanoSesto will significantly improve medical services and offer, by creating 1,000 new hospital beds between the new hospital, healthcare facilities and nursing houses. The creation of the Health and Research City will create a new healthcare and research centre district, significantly improving healthcare services, assistance, and research. In addition, the project will develop a training centre for tumours and neuroscience medicine professionals. The regeneration of the site will increase educational offers for new and existing residents by building and renovating primary and secondary schools in the area, as well as by creating new headquarters for San Raffaele University.

MilanoSesto also focuses on promoting sustainable mobility. The project will implement around 24.5 km of pedestrian walks and bicycle paths, completely renovate the new train station and install new bus stops around the neighbourhood. The mobility solutions provided will significantly improve the connection between the surrounding districts, as well as the connection with Milan. The project will focus on preserving and repurposing historical industrial buildings and structures to serve as venues for cultural and social events, while also creating public spaces for the community. These restored buildings will house a new Central Library, the new headquarters for Dance and Music Schools, and a new centre for the Museum of Contemporary Art. 

Lastly, MilanoSesto will significantly improve digitalization by adopting a smart city concept for the development, integrating real-time data networks to enhance urban efficiency, sustainability, and teleworking. Advanced digital and data infrastructure will optimize traffic, parking, public transport, air quality, waste collection, and energy use while ensuring privacy and security. This system will enable seamless urban planning, flexible space management, and reduced congestion. Predictive maintenance and intelligent administration will enhance security and prevent disruptions, making MilanoSesto a model for sustainable, connected urban development.

The regeneration of MilanoSesto is targeting the LEED Core & Shell Platinum certification for the new buildings, the LEED Neighbourhood Development for neighbourhood efficiency and sustainability, and the WELL Gold Certificate for the wellbeing of the residents.

Finance model

The total cost of the initiative is estimated to be around USD 3.8 billion, provided by a combination of both private and public funding. The private company MilanoSesto S.p.A. employed both private equity resources and loans. At the same time, it benefitted from direct government grants from the Lombardy Region and the national government for the development of the Health and Research City. A significant amount of resources has been employed for the land remediation activities, which cost around USD 658 million and were financed by Intesa Sanpaolo. By looking at each different lot, the total cost is divided between Health and Research City (13,1%; USD 503 million), Unione Zero (11,1%, USD 426.2 million), Unione Uno (8,6%, USD 330 million), Unione Due (4,3%, USD 165.1 million), Concordia 1 (16,3%, USD 625.8 million), Concordia 2 (17,5%, USD 671.9 million), Transider (2,4%, USD 92 million), Triangolo (2,7%, USD 103.67 million), Vittoria A, Vittoria B and Trai (17,3%, USD 664.3 million). The total cost also includes different additional land remediation activities (2,5%, USD 95.9 million) and the expenses for the implementation of public infrastructures and services (4,2%, USD 161 million).

The regeneration project employed different instruments to finance the MilanoSesto initiative. The private company MilanoSesto S.p.A. employed private equity resources from the constituting companies Hines, Prelios SGR, COIMA and Redo. The real estate investment company Cale Street also financed the project with private resources, signing an agreement with Hines to finance the acquisition of the land and the construction projects for the Unione Zero lot. In addition, the company acquired additional resources through loans from different private banks, namely Intesa Sanpaolo, Unicredit, Banco BPM and IFIS. Intesa Sanpaolo signed an agreement with Hines to finance the construction of the new bank headquarters located in the Unione Zero lot and financed the soil remediation works conducted by MilanoSesto. 

The private company MilanoSesto benefitted from direct government grants from the Regional Government of Lombardy. The Regional Government provided around USD 373,82 million (out of a total 494,76 million investment) to finance the development of the Health and Research City. The remaining funds are USD 43,98 million from the State and around USD 49,48 million in private capital. As the landowner of the Health and Research City site, the Regional Government of Lombardy, in partnership with the National Tumors Institute and the Carlo Besta Neurological Institute, conceded the development rights to the company CISAR Milano S.p.A. to conduct the development of the Health and Research City. CISAR Milano S.p.A. is a private company composed of construction and engineering firms such as Società Italiana per Condotte d’Acqua S.p.A., Inso Sistemi per le Infrastrutture Sociali, Italiana Costruzioni S.p.A., and Prima Vera S.p.A. This company is not only responsible for the construction of the healthcare district but will also oversee the maintenance of the facilities after their completion.

The MilanoSesto project employed different land value capture instruments to conduct the redevelopment of the area. The Municipality of Sesto San Giovanni approved the modification to the Integrated Program of Intervention to modify the land use on the site, allowing residential, commercial and office uses, public areas and viability networks. In addition, the Municipality of Sesto San Giovanni required both primary and secondary urbanization fees, valued at around USD 274,86 million. Furthermore, development exactions required the construction of public infrastructures, road networks and squares, public facilities and services to ensure the urbanization of the site. For example, USD 22,99 million of the USD 549,73 million private investment implemented in the Unione Zero lot were allocated to public infrastructure.

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Hines MilanoSesto - Hines