A record figure of €9.1b was invested in Italian commercial real estate market in 9M 2022, up 84% year-on-year, according to Savills, the best performance in a decade and 39% over the five-year average.
Deals worth over €100 mln accounted for 49% of the total, with foreign currency deals responsible for 72% of total volumes.
Milan was yet again the preferred destination, with 44% of total transactions, ahead of Rome (13%), while cities such as Verona (logistics), Siena (hospitality) and Bologna (logistics and offices) performed well in certain sectors.
Offices led investment volume with €3.7 bn, mainly in Rome and Milan, followed by logistics with €2.5 bn or 28% of overall investments.
Marco Montosi, Savills' head of investment for Italy, said: ‘The first nine months of the year have exceeded expectations. Given the good fundamentals and the consolidation of new asset classes, 2022 will be a record year even compared to the pre-Covid period. However, during the first part of 2023, we will see a reduction in volumes given the growing investor uncertainty due to the high volatility of financial markets and the global macroeconomic situation.’
Elena Zanlorenzi, Savills' head of research for Italy, added: ‘The uncertainty that has characterised the last few months shows no sign of abating. In the first three quarters of this year, the Italian macro-economic picture has turned out to be more positive than assumed only six months ago thanks to a recovery in travel, tourism and the resilience of the construction sector. Employment also remains in positive territory. The slowdown expected in 2023 will also be reflected in the Italian real estate market trend.’
Around 600,000 m2 of property was rented (+34% y/y), taking total absorption in 2022 to over 2 million m2 (+15%), a new nine month record.
The living and healthcare sectors saw €900 mln in investments, driven mainly by the residential segment, with 25 deals in the period.
Milan recorded 61% of the total volume in the multifamily segment, while in Rome (10%) the first BTR transaction was finalised. Around 6,000 BTR flats are in the pipeline in Milan and 600 in Rome.
The hospitality sector reached €1.1 bn, with leading destinations such as Rome, Venice and Siena recording increased investment volumes.
Transactions in the retail sector amounted to around €500 mln, which is double the figure on the same period in 2021, but still below the average for the period.
Savills expects investor demand for the Italian market to slow down in the coming months due to market uncertainty, although 2022 should close with a higher investment volume over 2021.
A further decompression of yields is expected in the coming months as prime rents reach higher levels for both logistics and residential.
