ITALY REAL ESTATE MARKET OUTLOOK
The new paradigm of monetary and fiscal policies will continue to support the economies of European countries.
The forecasts suggest a stronger GDP growth for Italy for the
period 2021-2023 compared to the last five-years average.
BANK OF ITALY: REAL GDP MACROECONOMIC FORECASTS FOR ITALY (THREE SCENARIOS)
Source: CBRE Research on Bank of Italy data, macroeconomic forecasts (December 2020).
2020 closed with €8.8 billion in investments (down 29%
on an annual basis), with new records for Logistics and
Residential. Office remains the first asset class, but investors
are still cautious, awaiting the upturn in occupier demand.
INVESTMENTS BY ASSET CLASS
Source: CBRE Research.
Uncertainty regarding the future impacts of the pandemic slows the demand for office space. Investors look at core transactions with excellent covenants in primary markets, whilst value-added investments are slowing down. The demand for flexible spaces is growing.
How has your company's approach to flex-space options changed as a result of the Covid-19 crisis?
Source: CBRE Occupier Survey 2021.
ITALY OCCUPIER SURVEY 2021
The growth of e-commerce and the impact of COVID-19
on retailers’ performances are hindering investments and
the demand for new spaces. Landlords and tenants are
carrying out renegotiations, but for now only targeting
E-COMMERCE PENETRATION TRENDS
Source: CBRE Research on Euromonitor data.
Record year for investments and take-up. The excellent performance of the demand and limited availability drive investors towards speculative developments by exploring new markets. The growth in e-commerce is driving the demand for urban logistics warehouses to host last-mile delivery services.
TAKE-UP AND PRIME RENTS
Investors are increasingly attracted by the multifamily sector and target developments in order to overcome the lack of
product on the Italian market. Investments on stabilized assets
are limited, volumes remain driven by value-add operations.
SHARE OF RESIDENTIAL INVESTMENT ON TOTAL CRE INVESTMENT VOLUME
Investments held back by the severe impact of the pandemic
on the performance of the hotel industry, but developments
have not stopped. Interest in the sector remains high for
trophy assets and opportunistic transactions.
CHANGE IN OVERNIGHT STAYS IN 2020 COMPARED WITH 2019
The Italian market for non performing loans closed another
year with a GBV investment volume higher than this cycle's
annual average (2014-2020). New flows of non-performing loans are expected to arrive in 2021, but much will depend on the actual consequences that the pandemic will have on the real economy.
IMPAIRED LOANS – ANNUAL FLOWS AND DEFAULT RATES
Source: CBRE Capital Advisors elaboration on Bank of Italy (Statistical Database) and Banca IFIS Market Watch.
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