Foreign investors take another look at Italian real estate

Italian real estate is back on the shopping lists of many investors, PropertyEU's latest update on the market has heard.

This marks a sharp turnaround from a year ago when the market was overshadowed by pre-election political uncertainty and talk of a possible exit from the euro.

Goldman Sachs certainly thinks the country is worthy of consideration, having given Italy a ‘buy’ recommendation. This supports the sentiment among government majority-owned company Cassa Depositi e Prestiti and some foreign players which have also recently shown positive interest, according to head of capital markets at K2Real, Gabriele Pompei.

Speaking at PropertyEU’s Italy Investment Briefing hosted by K&L Gates’ London office in mid-May, Pompei said: ‘Worth noting is the growth of institutional investors, including Italian real estate investment funds, which have recorded positive growth since 2000 thanks to the absence of subprime and a credit bubble which was not so pronounced in Italy as elsewhere.’

In fact the Italian real estate sector is performing much better than its service or manufacturing sectors, with today’s investments mainly focused on long-term, income-producing buildings rather than short-term trading activity.

The number of investment transactions may have halved compared to pre-crisis levels (spread more or less across the asset classes), but there has not been a corresponding fall in values, Pompei observed. Key words being bandied about in the market are stability and fundamentals, with investors seeking long-term, core plays in the form of recently built or refurbished buildings, located in prime areas and fully or almost fully rented to top-tier tenants. Pompei: ‘We are coming back to product, position and price, with the horizon focused on mid- and long-term investment.’

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