WTI Magazine #56 2015 March, 20
Author : ANCE Translation by:
The Italian real estate market is considered in Europe one of the most stable and interesting for opportunities and values. The long awaited recovery in the Italian real estate market started in 2013 and continued in 2014 with a total of € 5.3 billion of direct investment in the sector. A strong boost came from the second half of the year due to a series of domestic and external factors that improved the confidence of investors that started to look at the Italian market with strong interest.
In 2014 the volume of foreign investments, both European and non- European, reached 80% of the total size, returning to pre-crisis level. After years of global crisis, Italy is back in the sights of foreign investors. In 2014 the most active investors were opportunistic American funds while sovereign funds in the Middle East continued their acquisition of trophy assets.
2015: the awakening of the Italian real estate market
• Prices of new construction have started to grow again In the fourth quarter +0,7% , there was a further, significant 7.1% increase in sales compared to the same period of 2013.
• The best performance was recorded in the major cities with + 12.2% compared to the same quarter of 2013.
• In that same period, sales of commercial space (stores) recorded a 14.1% increase, compared to 2013, while industrial real estate grew by a solid +3.1%.
• Household mortgages grew by a + 9.8% in the first nine months of 2014.
SECTORS
Retail
In 2014 the retail investment market was vibrant and concentrated almost half of the investment volume (€2.6 billion). Investors where mostly attracted by good quality retail assets such as high-street retail and shopping centers.
Office
Italy's office investment market was active throughout 2014 (€1.5 billion). Offices attracted international investors both opportunistic and core/core plus players focused on prime quality assets. Milan and northern markets gathered the most interest.
Tourism/Hotels
Italy has become one of the most attractive targets for the hospitality in real estate sector. 2014 has seen a gradual recovery in the global tourism market, which has increased the number of arrivals (47.7 mln of international arrivals in 2013, UNWTO World Tourism Barometer) and the interest of foreign real estate investors in Italy. The annual total of investment volume in the sector reached €600 million, up 60% compared to 2013.
Industrial/Logistics
The country is the market with the highest potential among European countries, enjoying a strategic geographical position for the distribution of goods in Europe. In 2014 the market saw a year of solid activity (€380 mln) exceeding the volume recorded in 2013 by 75%.
Residential
The Italian residential market is moving towards the stabilization of its values. The atmosphere is filled with confidence and favorable conditions for the recovery. The residential property price index is still showing a downward trend in 2013 but reflecting its fundamentals and the absence of any risk of bubbles.
ANCE
The Italian Association of Construction Companies (ANCE) is a leading industrial organization and one of the largest in terms of associated members and annual turnover. Headquartered in Rome, ANCE actively supports the construction sector both nationally and on the international markets. The Italian construction sector contributes: 53.0% to gross fixed capital formation; 9.5% to GDP; 27.6% to industrial employment. Investments in the construction sector in 2013 have been 139,194 million euro: 48.6% housing; 32.3% private nonresidential; 19.1% public nonresidential. Internationally, the Italian construction companies operate in almost 90 countries in the 5 continents with construction contracts and concessions for around US $ 100 billion. The Italian real estate market is back and offers great opportunities to the investors. Competitive prices coupled with long term confidence and strong fundamentals are driving new investment flows into the sector.