Kering drops £1.1bn to snap up historic building in Milan

The acquisition, thought to be Europe's largest property deal in two years, will see the Gucci, Balenciaga and Alexander McQueen owner take over Via Monte Napoleone 8 from Blackstone Property Partners Europe.

Via Monte Napoleone 8 is an 18th-century building with more than 5,000 square metres of retail space, situated on one of Milan's iconic shopping street home to numerous other luxury boutiques.

It is thought to be one of the most expensive streets for property in the world, and the deal marks the "single largest asset sale in the Italian real estate market", according to a Blackstone executive cited by Bloomberg.

"This investment is part of Kering’s selective real estate strategy, aimed at securing key highly desirable locations for its Houses," the company said in a statement.

"Kering remains focused on proactively managing its real estate portfolio with the short- to medium-term objective of retaining a stake in its prime assets alongside co-investors in dedicated vehicles."

Kering's stock, which initially fell after the news was released, swung into positive territory by mid-morning and was trading up 0.2% at €367.05 by 1201 CEST.