Property deals hit 1.9 bln euros in Italy, foreign capital at pre-pandemic levels
Commercial real estate deals in Italy in the second quarter of the year were at more than 1.9 billion euros, in line with the previous year, says Savills in a country report.
Most of the deals being done are in logistics and offices, with the living sector becoming increasingly important.
“Expected changing ways of working and growing financing costs have made investors more cautious towards office sector especially in the first months of the year even though prime CBD premises remained resilient attracting strong interest especially from international players,” the report says.
“The outlook for the office investment market on the medium term is positive with high quality, well located and connected offices with green credentials at the top of investors’ agenda,” it adds.
In terms of office prime yields, they are stable in Milan CBD at 3%, with prime rents at 625 €/sq m/per year. In Rome CBD the yield is at 3.75%, with a prime rental level at 450 €/sq m/per year.
Future pipeline is solid with significant transactions due to close in the short term and investors’ interest ranging from development to core finished products. On the other side, the living sector is becoming increasingly important, attracting a growing share of investments, being supported by cross-border investors’ growing interest. Foreign capital reached pre-pandemic levels representing circa 70% of total invested volumes.
“Living accounted for 560 million euros, representing in 1H 2021 c.ca 18% of total investments,” points out Savills.
“The hospitality sector, with more than 417 million euros transacted, represented 13% of 1H2021 investments’ volumes confirming the first signs of the recovery of the sector.”