Investment in Italian commercial property is set to fall further this year with full-year volumes expected to halve to EUR 2 bn, from around EUR 4 bn a year earlier, according to Douglas Babington-Smith, head of the Italian office capital markets team at Jones Lang LaSalle. In the second quarter of 2009, investment volume totalled EUR 400-500 mln, marking an increase from EUR 300 mln registered in the first quarter of the year.
Investment in Italian commercial property is set to fall further this year with full-year volumes expected to halve to EUR 2 bn, from around EUR 4 bn a year earlier, according to Douglas Babington-Smith, head of the Italian office capital markets team at Jones Lang LaSalle. In the second quarter of 2009, investment volume totalled EUR 400-500 mln, marking an increase from EUR 300 mln registered in the first quarter of the year.
'The situation in the Italian investment market was dramatic at the end of 2008, but in terms of prices we didn't see the impact for at least nine months,' he said. Babington-Smith believes the market 'is now coming closer to the bottom in terms of cap rates and yields'.
Prime net office yields in Italy currently stand at 5.15%, after having moved out by about 55 basis points over the past year. Net yields for secondary office assets have moved out by over 100 bp, he said, reaching 6.25-6.5%. Local investors and private parties have been the most active buyers of office properties in the first half of 2009, while international players have virtually disappeared.