Foreign investors are once again providing a major boost to the Italian commercial real estate market, according to Marco Leone, senior advisor at research and data specialists Nomisma.
Speaking at the Italian Pavilion’s special investment event at Expo Real in Munich, Leone explained that 2016 was likely to perform as well as 2015, if current statistics were anything to go by.
'With €3.4 bn invested in the first half of 2016, comparable to the €2.6 bn invested in H1 2015, the CRE market is showing signs of stability,' said Leone. 'However, Italian investors are once again playing an almost negligible part in this. Foreign investors have been responsible so far for around 70% of the transacted volume, with German open-ended funds and other foreign funds making up 42.7%. Listed companies and REITs represent 19.4%, while 17.6% of volumes come from mostly foreign private companies.'
Offices remain the most popular sector, with 55% of total volumes picking up corporate premises, while retail and hotels count for 23% and 14% respectively.
Another key trend emerged with the spotlight turning back on Rome, largely neglected in favour of Milan in the past few years. 'Rome had become a completely residual market in recent times,' confirmed Leone. 'But this year there's been a real revival of interest in the capital. The proportion of investment in Rome in 2014 and 2015 was about 13% of the national total, but rose to 21% in the first half of this year. It's still not at Milan’s levels – representing 47% of all Italian investment volumes – but it's a significant increase.'
As for the outlook, while the trends have been good so far in the past 18 monhts, Leone thinks it is too soon to draw conclusions. 'I'd like to say that the positive trend will continue,' added Leone, 'but the reality is that we simply don’t know. We’re likely to only have a clearer picture on the outlook for Italy’s real estate market from this autumn onwards, when the results of banks stress tests emerge, and a number of political deadlines are met.'
