San Pellegrino mineral water is, if the marketing is to be believed, the choice of the rich and famous.  But how many could put their finger on a map and show you where exactly it comes from?

This is all about to change, or at least it will have by the time of the Milan Expo in 2015.  What’s happening in and around the spa town of San Pellegrino Terme could mean it’s a good time to start buying property in the vicinity.  Despite the efforts of the local press, even the nearby Milanese seem unaware of what’s happening just over an hour away.

In the early 20th century San Pellegrino Terme was the spa resort for royalty and the well-heeled, where they would stay in the Grand Hotel, play at the casino and relax at the spa.  With the loss of the casino’s license as well as falling victim to changing fashions, the town fell into decline during the 1970s, even now it has the sleepy feel of bygone glory.

Motivated by the need to turn the local economy around, the provincial authorities kick-started a restoration project that in just nine months saw all necessary planning permission and funding in place, involving the regional, provincial and town authorities working with the private sector.  Something of a record for not just Italy but anywhere in Europe. The Percassi group is investing, through its Premium Retail arm €94m, supplemented by a further €39m of public funds, these are initial figures which everyone inevitably expects to only go up.

The project was officially launched at a relatively small event for industry insiders at the Versace theatre in Milan in 2008, where the French architect Dominique Perrault was awarded the contract by a committee of notables, including the likes of Luciano Benetton.  Already underway is the restoration of the Grand Hotel – truly grand – which will become a 5-star hotel with its own spa.  Added to this will be a new 7-star hotel and luxury spa complex with a shopping village filled with designer boutiques and, I’m reliably told, the very best Italian restaurants.  The Perrault development will also include luxury apartments with hotel facilities, earmarked for timesharing.  

Having searched for properties in the area, the place to look, in my opinion, is in a little hamlet just above the town which developed almost a hundred years ago, as the more affluent patrons of the spa took to building their own villas, in what the locals term ‘Liberty’ style.  So influential was this group of residents that they even had a funicular railway built connecting the hamlet to the spa, which is due to be restored in the regeneration. Already the limited number of villas are starting to attract attention and no wonder – you can get a period property with stunning views, sat above what is being labelled as a super spa, with easy access to it via the Edwardian funicular.  I got the chance to view one of these properties in mid-2008, being sold by a Milan family for about €480,000, and was subsequently snapped up by a local industrialist who is currently restoring it.  Another, complete with original Liberty-style frescoes, is sat there waiting for tender loving care, asking around €370,000.  A bargain?  Certainly not 5 years ago, but now…quite possibly.

However, the real buys are in the immediate area, because inevitably prices have started to rise in the actual town of San Pellegrino at about the same rate as the scaffolding has been going up. But just a couple of miles down the road, the market remains as sleepy as ever.  At the end of 2008 I tracked down a beautiful restored stone house, in a small borgo, nestling beside a brook connected to neighbouring pastures by a stone bridge, on three floors, with a small garden, asking €172,000.  I also came across something slightly bigger, a 4-bedroom villa, large garden and quite wonderful views of the snow-capped Alps which, although asking around €370,000 could have been negotiated down.  

Is it a good place to buy?  The second home market generally is proving to be fairly robust in the face of all the economic bad news, maybe because property has historically been viewed as a safe haven in times of difficulty by the Italians.  This particular area has a degree of stability in as much as it’s reasonably close to Milan and the Milanese are the long-standing buyers, who oddly enough still seem, by and large, oblivious to what they are sat on.  

Part of the San Pellegrino project is the quite significant infrastructure improvements, in effect making the resort even more accessible from Milan and its three airports, and infrastructure always has a bearing on property prices.  The area offers skiing, accessibility to the lakes and, of course, the prospect of a 7-star spa resort with a world-famous brand name, something Nestlé, the brand’s owners, are quite interested in capitalizing on. The marketing machine hasn’t even kicked in yet, once it does San Pellegrino will be put firmly back on the map, plus 2009 will see sellers in Italy willing to concede larger discounts than usual. So, all in all not a bad buy.  

Paul Hudson is a buying agent with specialist knowledge of the market in Italy.

www.thepropertyfinders.com; +44(0) 7905 557170 or +39 338 9414596

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