Finance remains largest stumbling block in Italian property

Italiian real estate is once again in the sight lines of international investors but the market is contrained by a lack of bank financing.

This was the sobering messages to come out of PropertyEU’s Italy Investment Briefing hosted by K&L Gates’ London office in mid-May.

Francesco Sanna, a partner in law firm K&L Gates’ Milan office, said international interest, including from US players, in Italian real estate was on the rise. ‘Many developers also are looking to the eurozone and to Italy, though not all of them are starting to invest yet and it is the ones who know the market who have the advantage,’ he said.

However, the perennial issue is that of finance. While banks are starting to provide finance in other areas of Europe such as the Nordics and CEE, it is still a big problem elsewhere across the region, according to Sonae Sierra’s Fernandez. ‘Banks are still oriented towards the short term which is affecting the market. It is the biggest challenge for investment at the moment,’ he said.

Allianz Real Estate is currently looking at many cities, especially for retail, and has identified some that have the right parameters for investment. K&L Gates’ Sanna added: ‘Ten percent of available assets will be attractive to investors and there are plenty of opportunities which are not expensive. For those investing in real estate, the financing and structuring is quite stable.'

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