01
ECONOMY
02
OFFICES
03
RETAIL
04
INDUSTRIAL & LogIsticS
05
HOSPITALITY
07
INVESTMENT
08
INVESTMENT
09
SUSTAINABILITY
///////////////////////////
AGENDA
06
LIVING
ECONOMY
Economic Indicators
H1 2023
Despite initial expectations of recession at the beginning of the year, the Italian economy defied predictions and further expanded during the first half, GDP growth in June (Q2 23) posted a 1% increase Y/Y, and leading institutions have already upgraded year-end expectations (above 1%). Labor market conditions remain favorable and preliminary May figures point out an increase in employment and a decline of unemployment rate standing at 7.6%. Inflationary pressure are easing with June estimates highlighting a further decrease with consumer index (NIC) standing at 6.4%, narrowing the gap with the euro area. The decline in the energy prices mainly affected the result while food prices (unprocessed food) are still a bit worrisome.
Gross households' disposable income increased by 3.2% in Q1 23 compared to the last quarter 2022 thanks to the inflation deceleration and saving rate increased in comparison to the previous three months.
Industrial production returned to growth in May (monthly base) after four consecutive declines. Although this improvement, the trend is still declining with an yearly contraction standing at 3.2%.
GDP
PRIVATE CONSUMPTION
UNEMPLOYMENT
RATE
10YRS GOV. BOND YIELD
INFLATION
INDUSTRIAL PRODUCTION
+1.0%
+7.6%
+6.4%
+0.4%
+4.4%
-3.2%
Italian bond yields increased standing at ca 4.4% as tightening policy continues to be in place. After peaking in the first quarter of 2023, the Italy-Germany 10-year bond spread is forecasted to converge to a longer-term equilibrium just above 1% by 2024. Rising interest rates are starting to weigh on firms’ physical capital investments as evidenced by lower capital goods production.
Against a backdrop of high inflation (7.8%), the Portuguese economy still recorded a 6.7% increase in GDP in 2022, the highest in the European Union, largely thanks to the positive performance of private consumption (+5.8%) and exports (+17.3%).
(2023 May Y/Y )
(Q2 23 YoY)
source: Moody's (July 10th 2023), ISTAT
(May 2023, preliminary)
(June 2023)
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ECONOMY
Economic Forecasts
2022 / 2024
Short-term economic forecasts point to a slowdown of activity in the Portuguese economy, which, according to Moody's, is set to grow 1.3% in 2023, recovering to 2.8% in 2024. Against the backdrop of the prevailing strong global uncertainty, this outlook is driven by the expected continuation of high energy prices, reducing spending power, more difficult access to finance and a weakening of external demand; with a gradual reversal forecast to occur from the second half of this year.
GDP
PRIVATE CONSUMPTION
INVESTMENT
EXPORTS
INFLATION
UNEMPLOYMENT RATE
+1.3% / +2.8%
+0.8% / +6.6%
+5.2% / +2.4%
+0.4% / +1.8%
+3.8% / +1.2%
+6.6% / +6.2%
A steady reduction in inflation across Europe, will allow the European Central Bank's medium-term objective of 2% to be reached by 2025, which has justified the current monetary policy normalisation process and repeated interest rate hikes.
Thus, in 2023, Moody’s foresees moderate private consumption, a deferment of corporate investment and a slowdown in exports, with only the latter not forecast to recover in 2024.
Source: Moody's (February 2023)
Click over to view the notes
OFFICES
Italy
Milan
TAKE-UP
NEW COMPLETIONS
AVERAGE
DEAL SIZE
UNDER CONSTRUCTION
VACANCY
RATE
173,000
sq.m
(-33%)
1,350
sq.m
(-19%)
10.9%
(+6)
35,000
sq.m
1,054,000
sq.m
Note: variations refer to H1 2023 on H1 2022.
(Refurbishment)
(Speculative
and Pre-let)
Click on the icons to view the notes
OFFICES
Italy
Milan
Take-up by semester and average deal size
In the first half of the year the Milan occupier market has registered an absorption of 173,000 sq.m, significantly lower (-33%) than the exceptional value registered in H1 2022. On top of the total volume of leased space, there are 20,000 sq.m of sub-leased spaces (i.e. high quality spaces, recently leased which represent a "plug & play" solution), thus leading the total H1 absorption to 193,000 sq.m. Occupier demand is confirmed robust and corporates balance sheets are still sound as reflected by a solid labor market in H1 2023 mainly for office based employments. Quality, energy efficiency and sustainability remain the key drivers of demand, as confirmed by the share of Grade A / A Green absorption which continues to account for approx. 80% of the total volume as in the latest years.
Source: Cushman & Wakefield
Main transactions
Note: variations refer to H1 2023 on H1 2022
OFFICES
Italy
Milan
“1.7 million sq.m of new office expected by 2026. Circa 1 million sq.m currently under construction (40% pre-let) and 700,000 sq.m of potential developments.”
"Circa 35,000 sq.m have been completed throughout the H1 2023 and further 274,000 sq.m are expected within the end of the year – of which 39% pre-let.”
Main new completions
Vacancy rate by zone
Source: Cushman & Wakefield
Main project under construction and potential pipeline
Quality, energy efficiency and sustainability remain the key drivers of demand, being primary elements of talent attraction and retention strategies.
Nowadays, decarbonization and energy optimization are central for the real estate sector: an increasing number of landlords is aligning to the target of "net zero by 2050" required by the Paris agreement and are therefore carrying out a due diligence of their assets to estimate the capex needed to renew them. Many companies have also put lot of effort into "data monitoring" (i.E. Collecting And analysing consumptions) to manage resources more efficiently”.
OFFICES
Greater
Lisbon
Main projects under construction
Source: Cushman & Wakefield
Take up H1 23: 52,000 sqm
Prime Rent: 700 €/sqm/year
Prime Yield: 4.00%
Pipeline UC 2023/2026:
245,000 sqm
- pre-let: 31%
Take up H1 23: 10,000 sqm
Prime Rent: 530 €/sqm/year Prime Yield: 4.50%
Pipeline UC 2023/2026:
55,000 sqm
- pre-let: 96%
Take up H1 23: 49,000 sqm
Prime Rent: 470 €/sqm/year Prime Yield: 5.00%
Pipeline UC 2023/2026:
256,000 sqm
- pre-let: 39%
Take up H1 23: 39,000 sqm
Prime Rent: 350 €/sqm/year Prime Yield: 6.00 %
Pipeline UC 2023/2026: 349,000 sqm
- pre-let: 28%
Take up H1 23: 23,000 sqm
Prime Rent: 250 €/sqm/year
Prime Yield: 6.50%
Pipeline UC 2023/2026:
149,000 sqm
- pre-let: 63%
CBD
CENTRE
SEMICENTRE
PERIPHERY
HINTERLAND
Click on
MIND
Pipeline UC+Potential
2023-2026: 157,000 sqm
CITY LIFE DISTRICT
Pipeline UC+Potential
2023-2026: 85,000 sqm
SCALO FARINI
Pipeline UC+Potential
2023-2026: 123,000 sqm
PORTA NUOVA
Pipeline UC+Potential
2023-2026: 244,000 sqm
SCALO DI PORTA ROMANA
Pipeline UC+Potential 2023-2026: 252,000 sqm
SANTA GIULIA
Pipeline UC+Potentia
2023-2026: - sqm
OFFICES
Italy
Milan
CBD
PERIPHERY
CENTRE
HINTERLAND
SEMICENTRE
Take-up H1 23:
52,000 sq.m
Prime Rent:
€700/sq.m/yr
Prime Yield:
4.00%
Pipeline UC 2023/26:
245,000 sq.m
- pre-let: 31%
Take-up H1 23:
10,000 sq.m
Prime Rent:
€530/sq.m/yr
Prime Yield:
4.50%
Pipeline UC 2023/26:
55,000 sq.m
- pre-let: 96%
Take-up H1 23: 49,000 sq.m
Prime Rent:
€470/sq.m/yr
Prime Yield:
5.00%
Pipeline UC 2023/26:
256,000 sq.m
- pre-let: 39%
Take-up H1 23: 39,000 sq.m
Prime Rent:
€350 /sq.m/yr
Prime Yield:
6.00 %
Pipeline UC 2023/26: 349,000 sq.m
- pre-let: 28%
Take-up H1 23:
23,000 sq.m
Prime Rent:
€250 /sq.m/yr
Prime Yield:
6.50%
Pipeline UC 2023/26:
149,000 sq.m
- pre-let: 63%
MIND
SCALO FARINI
SCALO DI PORTA ROMANA
CITY LIFE DISTRICT
Pipeline UC+Potential
2023/26: 85,000 sq.m
Pipeline UC+Potential 2023/26: 123,000 sq.m
Pipeline UC+Potential 2023/26: 252,000 sq.m
Pipeline UC+Potential 2023/26: 157,000 sq.m
PORTA NUOVA
Pipeline UC+Potential 2023/26: 244,000 sq.m
BICOCCA
Pipeline UC+Potential 2023/26: 46,000 sq.m
OFFICES
Italy
Milan
Prime rents
The increased dynamism of the occupational market, against a shortage of quality supply, was reflected in the evolution of rental values, with a general rise in headline rents.
Corporates tend to lease smaller spaces but of higher quality and eventually at higher rents, especially for green certified spaces reflecting ESG criteria, which registered an increase in rental values in the range of 10-20% on other high quality assets without green certifications. This supports the theory of sustainable improvement of real estate as well as being a reputational goal for companies. The competition keeps prime rents high at €700/sq.m/yr in the CBD of Milan.
Source: Cushman & Wakefield
OFFICES
Italy
Rome
TAKE-UP
NEW COMPLETIONS
AVERAGE
DEAL SIZE
UNDER REFURBISHMENT
VACANCY
RATE
152,000 sq.m
(+82%)
2,000 sq.m
(+99%)
8.9%
(-17.5%)
33,000 sq.m
400,000 sq.m
(Refurbishment)
Note: variations refer to H1 2023 on H1 2022
Click over to view the notes
OFFICES
Italy
Rome
Main transactions
The Rome Office Market exceeded expectations during the first half of 2023, due mostly to the completion of two pre-let transactions, respectively in the Greater Eur and CBD submarkets, bringing take up to just over 150,000 sq.m close to figures recorded in 2019, the best year on record.
In general, transactions continue to be polarized between Central markets and the Greater Eur which continue to gather the majority of tenant interest jointly accounting for 80% of overall take up during H1 2023.
Secondary offices are suffering as occupiers downsize and/or move to Grade A spaces.
Take-up by semester and average deal size
Source: Cushman & Wakefield
OFFICES
Italy
Rome
Main Project Under Construction and Potential Pipeline
“In Rome new stock comes from refurbishments:
circa 400,000 sq.m (22 projects) are currently being renovated.
With some schemes reaching completion Pre-lets account for 57% of spaces under redevelopment”.
Source: Cushman & Wakefield
OFFICES
Italy
Rome
Main projects under construction
Source: Cushman & Wakefield
Take-Up 23H1: 23,900 sqm
Prime Rent: 550 €/sqm/year
Prime Yield: 4.25%
Pipeline UC 2023/2025:
43,000 sqm
pre-let: 33%
Take-Up 23H1: 36,700 sqm
Prime Rent: 380 €/sqm/year
Prime Yield: 4.75%
Pipeline UC 2023/2025: 107,600 sqm
pre-let/EU: 97%
Take-Up 23H1: 4,600 sqm
Prime Rent: 280 €/sqm/year
Prime Yield: 6.25%
Pipeline UC 2023/2025:
15,000 sqm
spec: 100%
Take-Up 23H1: 72,700 sqm Prime Rent: 360 €/sqm/year Prime Yield: 5.00%
Pipeline UC 2023/2025: 165,000 sqm
pre-let: 50%
Take-Up 23H1: 14,600 sqm Prime Rent: 150 €/sqm/year Prime Yield: 9.00%
Pipeline UC 2023/2025:
43,000 sqm
pre-let: 23%
GREATER EUR
PERIPHERY
Click on
FIUMICINO CORRIDOR
Prime Rent: 200 €/sqm/year Prime Yield: 7.75%
SCALO FARINI
Pipeline UC+Potential
2023-2026: 123,000 sqm
PORTA NUOVA
Pipeline UC+Potential
2023-2026: 244,000 sqm
TIBURTINA CORRIDOR
Prime Rent: 140 €/sqm/year Prime Yield: 8.25%
TUSCOLANA CORRIDOR
Prime Rent: 180 €/sqm/year Prime Yield: 7.75%
OFFICES
Italy
Rome
CBD
GREATER EUR
CENTRE
PERIPHERY
SEMICENTRE
Take-up H1 23:
23,900 sq.m
Prime Rent:
€550/sq.m/yr
Prime Yield: 4.25%
Pipeline UC 2023/25:
43,000 sq.m
pre-let: 33%
Take-up H1 23:
36,700 sq.m
Prime Rent:
€380/sqm/yr
Prime Yield: 4.75%
Pipeline UC 2023/25:
107,600 sq.m
pre-let/EU: 97%
Take-up H1 23:
4,600 sq.m
Prime Rent:
€280/sq.m/yr
Prime Yield: 6.25%
Pipeline UC 2023/25:
15,000 sq.m
spec: 100%
Take-up H1 23: 72,700 sq.m
Prime Rent:
€360/sq.m/yr
Prime Yield: 5.00%
Pipeline UC 2023/25:
165,000 sq.m
pre-let: 50%
Take-up H1 23:
14,600 sq.m
Prime Rent:
€150/sqm/yr
Prime Yield: 9.00%
Pipeline UC 2023/25:
43,000 sq.m
pre-let: 23%
TUSCOLANA CORRIDOR
SCALO FARINI
SCALO PTA ROMANA
FIUMICINO CORRIDOR
Prime Rent: €200/sq.m/yr
Prime Yield: 7.75%
Pipeline UC+Potential 2023-2026: 123,000sqm
Pipeline UC+Potential 2023-2026: 252,000sqm
Prime Rent: €180/sq.m/yr Prime Yield: 7.75%
TIBURTINA
Prime Rent: €140/sq.m/yr Prime Yield: 8.25%
BICOCCA
Piepeline UC+Potential 2023-2026: 46,000sqm
OFFICES
Italy
Rome
Prime rents
Like in the capital, considerable interest in Greater Porto and the quality of new buildings led to an increase in headline rents in most areas.
Source: Cushman & Wakefield
Lack of readily available quality offices coupled with tenant demand centered around the seat of Government, is behind the rise in rents within the CBD, while other submarkets confirmed values (note: correction in values with the Semi Centre is due to an adjustment of the submarket borders).
Moreover, stock in strategic locations is decreasing due to conversion to hospitality or residential use.
Souce: Cushman & Wakefield
OFFICES
Trends
HYBRID
WORKING MODEL
RESHAPING OFFICES
AS WORKPLACE COMMUNITIES
ESG CRITERIA
RENT STABILISATION
RENT
INCREASE
The shift to a hybrid working model is consolidated and has impacted the design of office spaces, which includes rotating workspaces (less in number) and more collaborative zones.
Offices have become spaces to meet, collaborate and share.
Office spaces are no longer viewed as an area where people exclusively work, but have become spaces to meet, collaborate and share. Larger projects extend their range of services and create both work and leisure experiences.
A must for new builds and substantial refurbishments.
High on the list of occupier demands.
Various existing real estate certifications for construction and occupancy are increasingly becoming a value driver.
Rent in all areas has stabilised, following a steady period of growth.
Quality space is decreasing rapidly as tenants seek to upgrade; strong competition for prime spaces is leading rents to a futher increase of the coming months especially in strategic locations.
OFFICE
What occupiers want
TOP CRE STRATEGIC DRIVERS
OFFICE COMMUNAL SPACE PROPORTION TO DOUBLE
OFFICE OCCUPANCY LEVEL
COST, TALENT SOURCING / RETENTION AND ESG are the top three strategic drivers for real estate decisions in EMEA. This is not surprising given the elevated uncertainty since mid-2022, as inflation peaked, and interest rates began to rise. Given that cost pressure is the top challenge facing occupiers in 2023 and real estate is typically the second-largest expense category (after talent), CRE executives are looking for ways to thoughtfully reduce spend: reducing floorplans, subleasing space, mothballing underutilized or unused floors, and expanding in lower cost markets. That said, occupiers are willing to spend money on the right investments. This includes buildings that offer sustainability features and green certifications, as well as offices that increase employees’ attendance and engagement; talent attraction and retention is one of the main drivers of the demand as companies want to offer their employees a better workplace and experience than their competitors.
As difficult as the pandemic was on urban cores, any talk of a mass exodus out of Central Business Districts (CBDs) is overblown. They remain the most desirable location for companies’ office headquarters. Two-thirds of occupiers prefer headquarters locations in the CBD (57%) or in emerging creative urban areas (12%). Occupiers are signaling that they intend to remain in urban cores with their major offices. Eighty percent of firms have not considered moving their offices out of the CBD.
In Italy, the demand concentrates in the CBD areas, as confirmed by the analysis of the average absorption in the last 10 years, which is equal to 27% of the total in Milan and 20% in Rome.
The targeted amount of communal space within the office has doubled compared to pre-pandemic levels (40-50% vs 20-30%), with majority of occupiers (89%) seeing the office as a place for creativity, innovation and a planned meeting point. Along with increasing communal spaces at their HQs, occupiers are looking at flexible offices and co-working spaces as a solution for an increasingly hybrid workforce.
Most occupiers are at occupancy levels that are below the pre-pandemic levels. Hybrid and remote work schedules have meant that employees are not in the office at the same rate as they had been prior to the pandemic. Among survey respondents, just over half of occupiers indicate that their office space is 31%-60% full on any given day. This will vary greatly by day of the week (Tuesdays are typically the highest and Fridays the lowest), but the weekly average remains below the 60-80% pre-pandemic norm.
CBD REMAINS THE PREFERRED HQ LOCATIONS
ESG IS RISING
IN IMPORTANCE
ESG ranks #3 in EMEA (#5 globally and #6 in Americas). Companies’ focus on ESG has accelerated in the past two years. Goals and implementation plans for various ESG components are increasingly seen as essential to organizations’ long-term financial performance, corporate reputation, and ability to attract clients, investment and talent. Two-thirds of CRE executives indicate their firm has ESG goals that they have already begun to implement (42%) or are planning to implement. Companies appreciate the environmental value of incorporating sustainability into workplace designs and portfolio strategies. Accordingly, occupiers are ready to pay a premium to incorporate sustainability into the workplace and their office portfolios. On average, they are willing to pay up to a 22% premium for buildings with green credentials.
In Italy corporates tend to lease smaller spaces but of higher quality and pay higher rents for green certified spaces reflecting ESG criteria, such spaces registered a 10-20% increase over other high quality assets without green certifications.
Top takeways
OFFICES
Fit out cost guide
COST, TALENT SOURCING & RETENTION AND ESG AS STRATEGIC DRIVERS
OFFICE COMMUNAL SPACE TO DOUBLE AS COMPANIES SEEK TO FOSTER CREATIVITY, INNOVATION AND COLLABORATION
CBD REMAINS THE PREFERRED HQ LOCATIONS
OFFICE OCCUPANCY REMAINS LOW, DRIVING FURTHER FOOTPRINT REDUCTION
ESG IS RISING IN IMPORTANCE
Cost, talent sourcing / retantion and ESG are the top three strategic drivers for real estate decisions in EMEA. This is not surprising given the elevated uncertainty since mid-2022, as inflation peaked, and interest rates began to rise. Given that cost pressure is the top challenge facing occupiers in 2023 and real estate is typically the second-largest expense category (after talent), CRE executives are looking for ways to thoughtfully reduce spend: reducing floorplans, subleasing space, mothballing underutilized or unused floors, and expanding in lower cost markets. That said, occupiers are willing to spend money on the right investments. This includes buildings that offer sustainability features and green certifications, as well as offices that increase employees’ attendance and engagement; talent attraction and retention is one of the main drivers of the demand as companies want to offer their employees a better workplace and experience than their competitors.
The targeted amount of communal space within the office has doubled compared to pre-pandemic levels (40-50% vs 20-30%), with majority of occupiers (89%) seeing the office as a place for creativity, innovation and a planned meeting point. Along with increasing communal spaces at their HQs, occupiers are looking at flexible offices and co-working spaces as a solution for an increasingly hybrid workforce.
As difficult as the pandemic was on urban cores, any talk of a mass exodus out of Central Business Districts (CBDs) is overblown. They remain the most desirable location for companies’ office headquarters. Two-thirds of occupiers prefer headquarters locations in the CBD (57%) or in emerging creative urban areas (12%). Occupiers are signaling that they intend to remain in urban cores with their major offices. Eighty percent of firms have not considered moving their offices out of the CBD.
Most occupiers are at occupancy levels that are below the pre-pandemic levels. Hybrid and remote work schedules have meant that employees are not in the office at the same rate as they had been prior to the pandemic. Among survey respondents, just over half of occupiers indicate that their office space is 31%-60% full on any given day. This will vary greatly by day of the week (Tuesdays are typically the highest and Fridays the lowest), but the weekly average remains below the 60-80% pre-pandemic norm.
ESG ranks #3 in EMEA (#5 globally and #6 in Americas). Companies’ focus on ESG has accelerated in the past two years. Goals and implementation plans for various ESG components are increasingly seen as essential to organizations’ long-term financial performance, corporate reputation, and ability to attract clients, investment and talent. Two-thirds of CRE executives indicate their firm has ESG goals that they have already begun to implement (42%) or are planning to implement. Companies appreciate the environmental value of incorporating sustainability into workplace designs and portfolio strategies. Accordingly, occupiers are ready to pay a premium to incorporate sustainability into the workplace and their office portfolios. On average, they are willing to pay up to a 22% premium for buildings with green credentials.
Below, we have summarized the most relevant elements for the Italian market, to find out more link here for the C&W global report
With sustainability targets increasingly becoming the norm, the focus, for many landlords, has been on ensuring their assets are aligned with legislative requirements as well as increasingly meeting tenant expectations, thus future-proofing their assets against obsolescence.
In the office sector most, if not all, major companies have adopted some form of hybrid working model as well as more visible practices to foster and promote diversity, equity, and inclusion (DE&I). The role of technology has increased in importance: both as an enabler of change and as a means of measuring its impact. Together, these factors mean that the fitting out of space goes beyond looks, to include how the space contributes to a company’s financial, social, and sustainability goals whilst also reflecting corporate brand and culture.
Over the last couple of years costs of energy and materials has risen exponentially. Inflation has proven to be more persistent than many economists originally envisaged, forcing downstream pricing to rise. On top of this sharp increases in fuel costs have increased transport costs adding to pricing all along supply chains.
In line with this, fit out costs have risen, though with little change across the proportionate share of cost splits (A/V, furniture, Fit out and professional services).
Italy recorded an average increase between 15-20% compared to the 2021/22 values considered in the 2023 Cost Guide, which in some cases is now lessening. Moreover, the issues with material shortage which was linked also to the Superbonus 110% (a maneuver intended to boost the construction industry strongly hit during the pandemic) has also decreased compared to 12/18 months ago and is now in line with normal timescales.
For more detailed information, please check out Cushman & Wakefield's Fit out cost Guide [link here]
Average office fit out cost (€ per sq.m)
OFFICES
Fit out cost guide
LOW
MEDIUM
HIGH
RENT STABILISATION
MEDIUM
- Limited meeting facilities
less than 10% of space.
- Paint to all walls.
- Low specification finishes
and carpet throuhout.
- Vinyl flooring to cafeterias.
- Minimal alterations to air
conditioning and ventilation.
- Data points to equal desk
positions.
- Locally procurement
furniture workstations.
- Meeting facilities around
10%-20% of space, with
part single glazed partitions.
- Alterations to less than 25%
of ceiling.
- Plasterboard ceiling to
meeting rooms.
- Feature wall finishes to
reception and cafeterias.
- Medium specification carpet
and finishes.
- Hard flooring to reception.
- Alterations to air conditioning
& ventilation to sult
cellurosation.
- Multiple data points to each
desk position.
- Meeting facilities to over
25% of space, with double
glazed partitions.
- Alterations to over 25% of
ceiling.
- Features & plasterboard
ceiling to reception and
offices.
- High specification carpet.
- Bespoke joinery to meetings
rooms and offices.
- Hard floating to cafeterias
and finishes.
- Modification to air
conditioning/ventilation
along with new air-
conditioning units.
- Additional feature lighting.
- Wired data provision (future
flexibility).
- High and /or imported
furniture.
Rent in all areas has stabilised, following a steady period of growth.
Quality space is decreasing rapidly as tenants seek to upgrade; strong competition for prime spaces is leading rents to a futher increase of the coming months especially in strategic locations
"All-in" fit out costs
Fit out cost (€/sq.m)
Reinstatement cost (€/sq.m)
OFFICES
Italy
Rome
Rome prime rents
Like in the capital, considerable interest in Greater Porto and the quality of new buildings led to an increase in headline rents in most areas.
Source: Cushman & Wakefield
Lack of readily available quality offices coupled with tenant demand centered around the seat of Government, is behind the rise in rents within the CBD, while other submarkets confirmed values. (NB correction in values with the Semi Centre is due to an adjustment of the submarket borders)
Moreover, Stock in strategic locations is decreasing due to conversion to hospitality or residential use.
RETAIL
CONSUMER
CONFIDENCE INDEX
CONSUMER CONFIDENCE INDEX
In the first half of 2023 the retail sector consolidated its recovery from the pandemic crisis. E-commerce maintained its positive momentum, even though in the main European markets there are signals of slowdown. On the products side, the most dynamic sectors were clothing, beauty and technology. On the services side, tourism and transportation together with events ticketing maintained the positive trend started last year.
Total
117 (-1.7%)
Food Retail
106.40
(+6% YoY)
(+3% QoQ)
Non-food Retail
+13%
Online shopping growth
E-COMMERCE
RETAIL SCHEMES
25,000 sq.m
New Completions
206,000 sq.m
Pipeline
2023-2024
1
3
4
2
Calendar and seasonal effects adjusted deflated; Index base 2015 = 100
Source: INE
In the quarter preceding the survey
Until 2025
Click over to view the notes
Sources:
Moody’s analytics (July 2023)
Osservatorio eCommerce B2c Netcomm (May 2023)
12%
(stable)
Online purchases penetration on total retail spending
RETAIL
The development of new shopping centres has slowed down in the last years, with significant delays due to the pandemic period. H1 2023 saw the completion of 2 schemes, To Dream and Caput Mundi, and the extension of an existing scheme, Settimo Cielo Retail Park. Worth to mention that Settimo Cielo will host the largest marquee in Europe entirely dedicated to padel courts.
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Retail stock evolution
Source: Cushman & Wakefield
* Forecast
Out of town
Schemes
Retail stock evolution | recent opening
The life-cycle of shopping centres is in a new phase, where Landlords and tenants are rethinking existing schemes to follow the latest trends and offer more appealing and competitive products.
Pipeline 2023 - 2024 | GLA under development
RETAIL
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Main luxury transactions
The luxury market was particularly sparkling in the first semester of 2023, registering intensive activities in the popular “Quadrilatero della Moda” in Milan, and in other top locations including Venice and Rome.
Exceptional demand for spaces along these exclusive high streets drove rents to 2-3% QoQ growth.
Source: Cushman & Wakefield
560 (=)
New openings
64%
High Street Retail
45%
F&B
5
Non-random sample of retail demand aggregated by Cushman & Wakefield based on public sources and targeted fieldwork
Demand
Mouse hover to view the notes
Luxuy Market
RETAIL
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Pandemic negative effects are definitely over and the high street market is living a bustling period. Interest from domestic and international brands is high, with Milan and Rome as first cities for expansion.
A number of important new openings and relocation characterized the first 6 months of 2023, which registered stable rents.
230 (+16)
New openings
89%
High Street Retail
57%
F&B
High street market
The food & beverage sector is in a fair moment. Domestic and international players are careful about rental values, but positive and proactive.
International expansion plans starts to be more tangible.
100 (+71)
New openings
90%
High Street Retail
56%
F&B
F&B market
Demand
Main high street transactions
Main F&B transaction
RETAIL
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Prime rents
Source: Cushman & Wakefield
Milan high streets confirmed to be the most required locations in Italy, with limited supply and increasing prime rental values. Rome and other touristic cities such as Venice and Florence are interesting for international brands returning on the Italian market.
In shopping centres, prime rents remained stable, rising slightly in retail parks. In general, prime out of town schemes are taking significant distance from other projects in terms of rental values and attractiveness.
RETAIL
Trends
RETAIL: SHOPPING IS AN IMMERSIVE EXPERIENCE
OPTIMISM IS CONTAGIOUS
HIGH STREETS DYNAMICS
- Physical stores confirm their key role in customers’ shopping experience.
- The combination of physical and online shopping is a winning synergy.
- Retailers are today more and more selective when choosing their stores.
- Crucial criteria are location and visibility.
- New international brands are exploring the Italian market.
- Newcomers are bringing some fresh air with new optimism, acting as magnets for other brands.
- Retailers recovered interest for expanding and optimizing their stores network.
- Vacancies are opportunities for active brands.
- Leasing processes are longer and more complex due to tenants’ higher requirements.
RETAILERS ARE SELECTIVE
OUT OF TOWN SCHEMES: NON STOP - EVOLUTION
- Classic hypermarket anchor stores re-dimensioning with more contemporary formats.
- New mass market brands arriving from Eastern Europe.
- Leisure is changing shape: retail parks offer sports facilities together with stores.
- Entertainment is moving towards “edutainment”: play areas are being revisited to teach while playing
INDUSTRIAL & LogIsticS
In 2022, trading activity in Portugal maintained an upward trend, with the export and import of goods recording year-on-year growth of around 20%, against a backdrop of a slowdown in price increases in the final months of the year.
NEW COMPLETIONS
AVERAGE
DEAL SIZE
TAKE UP
PIPELINE UNDER CONSTRUCTION
PRIME RENT MILAN - ROME
18,500 sq.m
1,257,000 sq.m
460,000 sq.m
1,460,000
sq.m
€65
sq.m/yr
(-5%)
(+6%)
(BTS/BTO/
Speculative)
(Speculative)
Note: variations refer to H1 2023 on H1 2022
6
Excluding fuel and lubricants
Click over to view the notes
Italy
Note: Data refer to the comparison between the first half of 2023 and the first half of 2022.
(+12%)
(+22%)
(-38%)
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Main transactions
In the first half of the year the Logistics occupier market in Italy has registered an absorption of circa 1,5M sq.m, which is slightly below (-6%) the value registered in H1 2022, which has been the best semester ever. If we analyze the transactions completed in the first half of the year, we can see a return of big deals: 11 transactions over 40,000 sq.m since the beginning of the year and 6 of these in Q2, in the whole 2022 there were only 8 transactions of this size. The majority of transactions is anyway between 5,000 sq.m and 25,000 sq.m: 73% over the total for the entire first semester. The demand is increasingly focused on spaces that meet ESG (Environment, Society, and Governance) criteria, with an emphasis on good energy performance and efficiency.
Take-up by semester
Source: Cushman & Wakefield
Source: Cushman & Wakefield; IPI
Increased interest in speculative development, as opposed to buit-to-suit projects, was consolidated in the semester, with almost 41% of the volume represented by speculative projects and 23% by build to suit assets. Given the strong demand for high quality spaces and the decrease in the availability of projects in pipeline will bring to a significant reduction of the availability in the near future.
INDUSTRIAL & LogIsticS
If we consider the first half of the last three years of the Logistics occupier market in Italy, it is evident as 3PL, Retailer and e-commerce are confirmed as the most active players.
3PLs have consistently accounted for more than 60% of the square meters leased in the semester reaching 66% of the volume transacted in the first half of 2023.
Retailers have increased market share in the past two years (accounting for more than 14% of the six-month volume).
E-commerce, despite slowing down from 2020/2021, maintains an active demand, as consumers are opting for the convenience of online shopping.
Main projects under construction
Source: Cushman & Wakefield
Among the main future supply currently under construction is the development of the second phase of Aquila Capital's project in Azambuja; and the entry into the market of Montepino, which recently reached an agreement with Leroy Merlin to build what will be the largest logistics platform in the country, in Castanheira do Ribatejo.
INDUSTRIAL & LogIsticS
Take up by tenant sector
Greater
Lisbon
Excluindo combustíveis e lubrificantes
Prime rents
LOGISTICS
WAREHOUSE
(>10,000 SQ.M)
€65/sq.m/yr
Source: Cushman & Wakefield
INDUSTRIAL & LogIsticS
Big Box Distribution Centers - logistics units of 10,000 sq.m plus, used for storage and distribution of goods. Units will typically be located on the outer edge of the city and in the proximity of major road junctions. Facilities may also be close to other transportation hubs (road/ rail/ air/ water networks). Ca. 3-5% office content. In some geographies such larger units may not exist, thus rents/ yields should reflect what is considered major logistics facilities in those markets. Typically, the building coverage ratio is 50%.
Greater
Porto
Source: Cushman & Wakefield
Excluindo combustíveis e lubrificantes
Prime rents
LAST MILE /
COURIER LOGISTICS
(5,000 - 15,000 SQ.M)
€105/sq.m/yr
INDUSTRIAL & LogIsticS
Last Mile/for Courier – units will typically be in the region of 5,000-15,000 sq.m. Ideally located in the city hinterland or in proximity of motorway junctions in the vicinity of major metropolises – within about 20 minutes from the city center. The unit could be used for courier activities and/or for urban distribution of goods. Units may provide cross-docking for transfer of goods between truck and vans; in this case the width of the warehouse should be in the range of 40/50 meters. Units are likely to have ca. 5%-10% office content. The characteristics of this type of assets are: high number of loading bays, floor to ceiling height not necessarily over 7 meters, good maneuvering areas and quantity of parking lots. Typically, the building coverage ratio is 30%.
HOSPITALITY
Tourism
Indicators
The Italian Hospitality sector has for years been fragmented and characterized by low hotel chain penetration. However considerable investment in the sector, generational change and long awaited stock renovation are creating movement and interest in this asset class.
Over the last year tourism indicators followed an upward reflecting a recovery in hotel activity, with significant increases compared to the previous year. The number of guests and overnight stays recorded year-on-year increases of around 50%, reaching levels similar to those of 2019.
The RevPAR (Revenue per Available Room) exceeded Values recorded in 2019 exceeding €150; with the occupancy rate (per room) standing around 70% just -1.5% on 2019 figures.
TOURISTS
OVERNIGHT STAYS
REVPAR
AVERAGE
ADR
OCCUPANCY RATE
188*M
Overnight
Stays
412*M
Average
ADR
€230
AVERAGE RevPAR
€150
AVERAGE
OCCUPANCY
around 70%
Source: ISTAT (last available data 2022), AICA and STR
*Provisional data
(+51% vs 2021)
(+42% vs 2021)
(+41% vs 2019)
(+39.5% vs 2019)
(-1.5% vs 2019)
Foreigners
46%
Tourist
Foreigners
49%
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Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Overnight stays and RevPar in main cities
Italian hotel performance strengthened since the beginning of the year; both Occupancy and ADR significantly increased compared to 2022, boosting the RevPAR to 180 EUR in June, circa 50% above 2019 levels (June).
The market performance index (vs 2019 levels) has continued to improve, aligning to levels set in 2019. The latest ADR index, already surpassed 2019 levels during 2022, has continued to rise strongly outpacing inflation.
Major cities are also experiencing a positive trend in their performance (RevPAR). With Venice ranking highest with 200€ RevPAR followed by Florence 168€ RevPAR. The recovery in physical business meetings helped Milan to recover the pre-pandemic performance.
Hospitality performance index Italy
Source: STR
Source: ISTAT (last data available 2022), AICA, STR
7
Until 2025
HOSPITALITY
The Short-Term Rental segment attracted 9.8 million overnight stays and 4.1 million guests, in line with the hospitality sector a growth of about 90%, but still below 2019 (4% and 10%, respectively). Total revenue also doubled compared to the previous year and was 14% above 2019, standing at €437 million; and compared to this latter year, RevPAR recovered 17%, to €36.7.
Mouse hover to view the notes
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
New Supply
H1 2023 saw a total of 29 new openings (rebranding/conversions) for roughly 2,500 rooms in the 4 and 5-star category. Supply will continue to grow over the coming years with 44 projects expected by 2027, totaling over 4,000 keys.
Main openings
Source: Cushman & Wakefield
Até 2025
Supply will continue to grow in the coming years, with close to 130 projects expected to open by 2025, totalling 11,300 keys mostly 4- and 5-star hotels (30% and 33%, respectively) in the metropolitan areas of Lisbon and Porto.
+51
Hotels
opened in 2022
+2,910
New Keys
HOSPITALITY
HOSPITALITY
Rome attracts tourists from all over the world thanks to its longstanding history and cultural heritage. The Eternal City, has the biggest historical city centre of the world and a multitude of cultural attractions.
29,3M
XX million
H1 2023:
70%
H1 2023:
€185
So far in 2023 the city has seen 10 new openings in the 4 and 5 star category, for a total of 1,315 rooms; a further 3 openings are expected by year end with an additional 256 rooms.
The estimated pipeline for the next two years, totals 8 new openings (rebranding and conversions) for a total of 1,005 rooms.
Rome
OVERNIGHT
STAYS
AIRPORT FIUMICINO
AIRPORT CIAMPINO
REVPAR
OCCUPANCY
RATES
TOURIST ARRIVALS
(XXX% vs 2021;
XX% vs 2019)
(+0.5% vs 2019)
(+62% vs 2019)
PASSENGERS
(+152% on 2021; -33% on 2019)
3,5M
(+49% on 2021; +41% on 2019)
Source: ISTAT
In touristic establishments
8
9
In hotel establishments
10
In hotel establishments
11
Source: Study of the Economic Impact of Cruise Activity in Lisbon, promoted by the Administration of the Port of Lisbon in partnership with Lisbon Cruise Port and carried out by Netsonda and Nova SBE.
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AIRPORT FIUMICINO
AIRPORT
CIAMPINO
AIRPORT
CIAMPINO
OCCUPANCY
RATE
RevPAR
1,261
HOTELS
58,433
KEYS
118,937
BEDS
HOSPITALITY
Milan, capital of fashion, represents one of the most important market reference for business-oriented tourism due to its economic and manufacturing industry and the widespread transport network.
21,3M
XX million
H1 2023:
70%
H1 2023:
€130
Since the beginning of 2023 ther have been 5 new openings in the 4 and 5 star category, for a total of 307 rooms; a further 6 openings are expected by year end with an additional 515 rooms.
The estimated pipeline for the next two years, totals 8 new openings (rebranding and conversions) for a total of 1,005 rooms.
Milan
OVERNIGHT
STAYS
MALPENSA
AIRPORT
LINATE
AIRPORT
REVPAR
OCCUPANCY
RATE
TOURIST ARRIVALS
(+XX% vs 2021;
+XX% vs 2019)
(-5.5% vs 2019)
(+26.5% vs 2019)
TURIST ARRIVALS
(+123% vs 2021; -26% vs 2019)
7,7M
(+78% vs 2021; +17% vs 2019)
Source: iSTAT
In touristic establishments
12
13
In hotel establishments
14
In hotel establishments
Fonte: Estudo de Impacto Económico da Atividade de Cruzeiros em Lisboa, promovido pela Administração do Porto de Lisboa em parceria com a Lisbon Cruise Port e realizado pela Netsonda e Nova SBE
Click over to view the notes
AIRPORT
MALPENSA
AIRPORT
LINATE*
AIRPORT
ORIO AL SERIO
13,1 M
(+103% vs 2021; - 51 vs 2019)
442
HOTELS
27,204
KEYS
50,874
BEDS
AIRPORT
* Linate Airport closed for 6 moths during 2019 with air traffic diverted to Malpensa
ORIO AL SERIO AIRPORT
HOSPITALITY
Trends
STRONG
DEMAND
A NEW
ERA
PERFORMANCE
Blurring lines between traditional hospitality and living
Leisure and lifestyle at an advantage
A side from the four main cities of Rome, Milan, Florence and Venice, interest for secondary cities as well as Leisure Destinations (seaside, mountains, countryside and lakes) is increasing.
Increasing competition from international operators/chains is leading to the redevelopment of older properties and a departure from family management. This is both a generational change and an increasing demand for professionalism and efficiency in management.
The increase in hotel performances is leading to a greater interest on behalf of investors with varied profiles
The resilience shown during the pandemic and the rapid evolution of mobile lifestyles led investors to look for unconventional forms of hospitality, with hotel concepts increasingly integrating long-term stays, co-living, student accommodation and housing.
Developers and brands will be more aware of consumer trends and more agile in responding with new real estate products.
Investors will continue to invest in the strong recovery and prospects for continued growth in the leisure and lifestyle segment. Several funds were capitalised during 2022 with a view to source investment in leisure products during 2023 and beyond.
Demand for investment opportunities will shift from resorts to urban lifestyle projects in popular and safe destinations, in key southern European geographies, including Portugal.
LIVING
Freehold
Milan & Rome
ITALY
In 2022 the national freehold market (NTNs) recorded 14% growth over 2021, which had been the best year ever until then, but values has started to fall in the first quarter of 2023 (-8.3% compared to Q1 22). Market activity has decreased in every major city, mainly as a result of the rising residential values and higher interest rates, however is still higher than the 10-year average (+30%).
The best performing cities remain Milan and Rome, which accounted for about 10% of the overall residential sales (in 2022 and confirms in Q1 2023). Rome is the city with the highest number of transactions but Milan remains the most active and attractive residential market, characterized by high level of demand and by vivacious demographic, student and job market trends.
MILAN MARKET
In the first quarter of the year, the Milan market recorded a deceleration of NTNs amounting to -23% over Q1 22, which had nevertheless been the best quarter ever. This decrease is attributed more to the central areas than to the hinterland areas of Milan. When considering the band size, 50-85 sq.m is confirmed the most transacted.
ROME MARKET
In the first quarter of the year, Rome recorded a deceleration of NTNs amounting to -10% compared to Q1 22. Looking at the band size, 50-85 sq.m is confirmed the most transacted.
TRANSACTIONS
AVERAGE
VALUE
AVERAGE
SALE TIME & DISCOUNT
AVERAGE SIZE
AVERAGE LOAN
Milan €10M
Rome €10.2M
Milan €350,000
Rome €255,100
Milan 80.4 sq.m
Rome 93.1 sq.m
AVERAGE SALE TIME (months)
Milan € 241,900
Rome € 194,400
* Source: OMI (Agenzia delle Entrate - data 2022), Rapporto Imobiliare Agenzia delle Entrate, Nomisma
* Note: source - C&W relaboration on Agenzia delle Entrate data
excluding Porta Nuova (9,700 €/sq.m)
excluding City Life (9,500 €/sq.m)
Data refers to dwellings in good and excellent conditions
(+51% os 2021)
(+42% on 2021)
(+% on 2021)
Milan 3.6
Rome 4.17
(+63% on 2021)
Milan 28,595
Rome 40,064
VOLUME
AVERAGE
PRICE*
NUMBER
Milan €4,236 /sq.m
Rome €2,799
/sq.m
AVERAGE UNIT VALUE
AVERAGE
DISCOUNT
Milan 3.9%
Rome 5.6%
Click over to view the notes
LIVING
Leasehold
Milan & Rome
ITALY
In 2022, nearly 1.6 million of new lease contracts were registered in Italy
(-1.6% over 2021). The contracts involved approx. 2 million properties.
MILAN MARKET
The Milan market recorded an increasing number of new contracts (68% were ordinary long-term contract) and growing rental levels (circa +19% from 2016). Moreover, the average letting time has decreased during the year (1,6 months) and whilst the Average Rent has risen. The average leased area has become smaller since 2016 and is currently about 68 sq.m.
ROME MARKET
The Rome market market recorded an increasing number of new contracts (+6.84%) after covid emergency (2020), 58% of which is represented by Rent with Incentives.
Moreover, the average letting time has decreased during the year (2,6 months) and whilst the Average Rent has risen. The Average leased The average leased area has become smaller since 2016 and is currently about 80 sq.m.
TRANSACTIONS
AVERAGE TIME
TO LET
REVPAR
AVERAGE RENT
AVERAGE SIZE
Milan €350,000
Rome €255,100
Milan 67.6 sq.m
Rome 79.7 sq.m
AVERAGE TIME (months)
Milan € 241,900
Rome € 194,400
* Source: OMI (Agenzia delle Entrate - data 2022), Rapporto Imobiliare Agenzia delle Entrate, Nomisma
* Note: source - C&W relaboration on Agenzia delle Entrate data
excluding Porta Nuova and City Life.
Data refers to dwellings in good and excellent conditions
(+51% os 2021)
(+42% on 2021)
(+% on 2021)
Milan 1.6
Rome 2.6
(+63% on 2021)
Milan 51,821
Rome 55,557
AVERAGE
PRICE*
NUMBER
Milan €152* €/sq.m/yr
Rome €125*
€/sq.m/yr
AVERAGE UNIT VALUE
AVERAGE
DISCOUNT
Milan 3.9%
Rome 5.6%
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LIVING
Milan
Freehold
TRANSACTION
VOUME
AVERAGE
PRICE
NUMBER OF TRANSACTIONS
AVERAGE UNITS
VALUE
NEW
€10,008
million
(+15%)
TOTAL
11,060
(+1%)
NEW
€350,00
(-1%)
TOTAL
4,220 sq.m
(+1%)
NEW
80,4sq.m
TOTAL
-7%
NEW
3,6%
TOTAL
6 months
KEY DATA 2022
NEW
80,4
sq.m
(+3%)
TOTAL
6,030
(-7%)
NEW
3,6
months
(+3%)
TOTAL
3,120 sq.m
(+9%)
NEW
3,9%
TOTAL
-6%
NEW
€ 241,90
TOTAL
8 months
AVERAGE
TIME
AVERAGE
SIZE
AVERAGE DISCOUNT
AVERAGE LOAN
PORTO
15
New and used
Source: SIR / Confidencial Imobiliário (SIR Ci)
Mouse hover to view the notes
Transactions are still growing +3.05% on 2021.
50-85 sqm band size results the most transacted, with c. 42% on total transactions
Quicker sale time than 2021 with an average selling price that has remained constant
* Source: C&W relaboration on Agenzia delle Entrate data
Data refers to dwellings in normal conditions
Source: OMI (Agenzia delle Entrate), Rapporto Imobiliare Agenzia delle Entrate, Nomisma
TRANSACTION
NUMBER
28,595
AVERAGE UNITS VALUE
AVERAGE PRICE*
4,236
€/sq,m
AVERAGE SIZE
AVERAGE
SALE TIME
3,6
months
AVERAGE DISCOUNT
AVERAGE
LOAN
€241,900
LIVING
Rome
Freehold
TRANSACTION
VOUME
AVERAGE
PRICE
NUMBER OF TRANSACTIONS
AVERAGE UNITS
VALUE
NEW
€10,219M
(+15%)
TOTAL
11,060
(+1%)
NEW
€255,100
(-1%)
TOTAL
4,220 sq.m
(+1%)
NEW
93.1sq.m
TOTAL
-7%
NEW
5.6%
TOTAL
6 months
KEY DATA 2022
NEW
80,4
sq.m
(+3%)
TOTAL
6,030
(-7%)
NEW
3,6
months
(+3%)
TOTAL
3,120 sq.m
(+9%)
NEW
3,9%
TOTAL
-6%
NEW
€ 241,90
TOTAL
8 months
AVERAGE
TIME
AVERAGE
SIZE
AVERAGE DISCOUNT
AVERAGE LOAN
PORTO
15
New and used
Source: SIR / Confidencial Imobiliário (SIR Ci)
Mouse hover to view the notes
Transactions are still growing +3.05% on 2021
50-85 sqm band size results the most transacted, with c. 42% on total transactions
Quicker sale time than 2021 with an average selling price that has remained constant
* Source: C&W relaboration on Agenzia delle Entrate data
Data refers to dwellings in normal conditions
Source: OMI (Agenzia delle Entrate), Rapporto Imobiliare Agenzia delle Entrate, Nomisma
TRANSACTION
NUMBER
40,064
AVERAGE UNITS VALUE
AVERAGE PRICE*
2,799
€/sq.m
AVERAGE SIZE
AVERAGE
SALE TIME
4.75
months
AVERAGE DISCOUNT
AVERAGE
LOAN
€194,400
VOLUME OF TRANSACOTIONS
LIVING
Milan
Leasehold
TRANSACTION
VOUME
AVERAGE
PRICE
NUMBER OF TRANSACTIONS
AVERAGE UNITS
VALUE
NEW
€10,219M
(+15%)
TOTAL
11,060
(+1%)
NEW
152
€/sq.m
(-1%)
TOTAL
4,220 sq.m
(+1%)
NEW
67.65
sq.m
TOTAL
-7%
NEW
1.6
months
TOTAL
6 months
KEY DATA 2022
NEW
80,4
sq.m
(+3%)
TOTAL
6,030
(-7%)
NEW
3,6
months
(+3%)
TOTAL
3,120 sq.m
(+9%)
NEW
3,9%
TOTAL
-6%
NEW
€ 241,90
TOTAL
8 months
AVERAGE
TIME
AVERAGE
SIZE
AVERAGE DISCOUNT
AVERAGE LOAN
PORTO
15
New and used
Source: SIR / Confidencial Imobiliário (SIR Ci)
Mouse hover to view the notes
Increasing number of new contracts and growing rental levels (c. +19% since 2016)
68% is represented by Ordinary long-term contract.
Decreasing of time to let 1,6 months and increasing Average Rent
The Average leased Area is slightly decreasing since 2016. In 2022 it is about 68 sqm.
* Source: C&W relaboration on Agenzia delle Entrate data
Data refers to dwellings in normal conditions
Source: OMI (Agenzia delle Entrate), Rapporto Imobiliare Agenzia delle Entrate, Nomisma
TRANSACTION
NUMBER
40,064
AVERAGE
RENT
AVERAGE PRICE*
2,799
€/sq.m
AVERAGE
SIZE
AVERAGE
SALE TIME
4.75
months
AVERAGE
TIME TO LET
AVERAGE
LOAN
€194,400
VOLUME OF TRANSACOTIONS
LIVING
Rome
Leasehold
TRANSACTION
VOUME
AVERAGE
PRICE
NUMBER OF TRANSACTIONS
AVERAGE UNITS
VALUE
NEW
€10,219M
(+15%)
TOTAL
11,060
(+1%)
NEW
125
€/sq.m
(-1%)
TOTAL
4,220 sq.m
(+1%)
NEW
79.7
sq.m
TOTAL
-7%
NEW
2.65
months
TOTAL
6 months
KEY DATA 2022
NEW
80,4
sq.m
(+3%)
TOTAL
6,030
(-7%)
NEW
3,6
months
(+3%)
TOTAL
3,120 sq.m
(+9%)
NEW
3,9%
TOTAL
-6%
NEW
€ 241,90
TOTAL
8 months
AVERAGE
TIME
AVERAGE
SIZE
AVERAGE DISCOUNT
AVERAGE LOAN
PORTO
15
New and used
Source: SIR / Confidencial Imobiliário (SIR Ci)
Mouse hover to view the notes
Growth in number of new contract after covid emergency (2020).
+ 6.84% 58% is represented by Rent with Incentives.
Decreasing of time to let 2.65 months and increasing Average Rent.
The Average leased Area is slightly decreasing since 2016. In 2022 it is about 80 sqm
* Source: C&W relaboration on Agenzia delle Entrate data
Data refers to dwellings in normal conditions
Source: OMI (Agenzia delle Entrate), Rapporto Imobiliare Agenzia delle Entrate, Nomisma
TRANSACTION
NUMBER
55,557
AVERAGE
RENT
AVERAGE PRICE*
2,799
€/sq.m
AVERAGE
SIZE
AVERAGE
SALE TIME
4.75
months
AVERAGE
TIME TO LET
AVERAGE
LOAN
€194,400
VOLUME OF TRANSACOTIONS
STUDENT ACCOMODATION
Italy
Leasehold
TRANSACTION
VOUME
AVERAGE
PRICE
NUMBER OF TRANSACTIONS
AVERAGE UNITS
VALUE
NEW
€10,219M
(+15%)
TOTAL
11,060
(+1%)
NEW
ca. 109,680
(-1%)
TOTAL
4,220 sq.m
(+1%)
NEW
79.7
sq.m
TOTAL
-7%
NEW
2.65
months
TOTAL
6 months
MARKET FUNDAMENT ITALY
NEW
80,4
sq.m
(+3%)
TOTAL
6,030
(-7%)
NEW
3,6
months
(+3%)
TOTAL
3,120 sq.m
(+9%)
NEW
-0.9%
STUDENT REGISTERED
-6%
(ETPs)
>500
TOTAL
8 months
AVERAGE
TIME
AVERAGE
SIZE
AVERAGE DISCOUNT
AVERAGE LOAN
PORTO
15
New and used
Source: SIR / Confidencial Imobiliário (SIR Ci)
Mouse hover to view the notes
First mover market activity primarily focused on development transactions.
A diverse educational offer across some of the oldest universities in the world
Lack of fit for purpose and modern purpose built accommodation. Most of the student accommodation are managed by Public entity
Source: MIUR accademic year 2021/2022
FULLTIME STUDENTS
ca. 1.8 Mln
INTERNATIONAL
STUDENTS
AVERAGE PRICE*
2,799
€/sq.m
AVERAGE
SIZE
AVERAGE
SALE TIME
4.75
months
AVERAGE
TIME TO LET
AVERAGE
LOAN
€194,400
VOLUME OF TRANSACOTIONS
Why invest in Italy?
STUDY IN MILAN & ROME
27.5%
STUDY IN MILAN & ROME
35%
Italy Student Numbers and Yearly Change
Student by CIty 2021/2022
(2020/2021)
FOREIGN
+7.2%
STUDENT ACCOMMODATION
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Potential demand
Milan is the leading student market, with the higher provision rates of the sample, as private investors see it as a gateway city to access the sector in Italy.
Nevertheless, Milan provision rate is very low considering continental standards as Milan confirmed to be the preferred destination in Italy for international students
Sources: Miur (Ministero dell’istruzione) and C&W data
Amostra não aleatória da procura de retalho agregada pela Cushman & Wakefield baseada em fontes públicas e trabalho de campo direcionado
According to the Bank of Portugal, mortgages were granted to the total amount of €16.2 billion, the highest in the last 15 years.
16
Percentage values correspond to the variation between 2022 compared to 2021
Mouse hover to view the notes
12,100
Potential demand missmatch
Operating beds
Pipeline 2023 - 2027
+ 12,300
NEW BEDS
TOTAL STUDENTS
211,754
69,066
DOMESTIC STUDENT
FROM OUTSIDE REGION
20,325
INTERNATIONAL STUDENTS
Milan university demand
Milan
STUDENT ACCOMMODATION
Dados deflacionados e ajustados de efeitos de calendário e da sazonalidade; Índice com base 2015 = 100
Fonte: INE
No trimestre anterior ao inquérito
Até 2024
Potential demand
Rome sees the highest demand mainly due to a huge number of students coming from other Italian regions.
Despite this, the Eternal city has the lowest provision rate and, consequently, needs a huge number of beds.
Sources: Miur (Ministero dell’istruzione) and C&W data
Amostra não aleatória da procura de retalho agregada pela Cushman & Wakefield baseada em fontes públicas e trabalho de campo direcionado
According to the Bank of Portugal, mortgages were granted to the total amount of €16.2 billion, the highest in the last 15 years.
16
Percentage values correspond to the variation between 2022 compared to 2021
Mouse hover to view the notes
Potential demand missmatch
Operating beds
Pipeline 2023 - 2027
+ 1,300
NEW BEDS
TOTAL STUDENTS
194,651 (*)
42,738
DOMESTIC STUDENT FROM OUTSIDE REGION
14,749
INTERNATIONAL STUDENTS
Rome university demand
Rome
6,160
* not considering students of onlie universities
* not considering students of onlie universities
LIVING
Lisbon
Sales price of apartments
In 2022, the average sales price (new and used), in Lisbon, stabilised at €4,220/sq.m, and at €6,260/sq.m for new apartments. The Traditional Zone and Historical Centre commanded the highest sales prices, standing at €5,260/sq.m and €5,220/sq.m, respectively. The average discount and adjustment rate remained at 7%; with the average take-up time decreasing slightly to 6 months.
The difference between the final sales price and the initial price offered for the property.
In terms of future supply, Lisbon recorded a sizable decline in the licensing of residential projects, namely 15% of both licensed and submitted projects.
Source: Cushman & Wakefield; SIR Ci
Price of apartments
17
New and used
The difference between the final sales price and the initial price offered for the property
18
Mouse hover to view the notes
LIVING
Porto
Price of apartments
In Porto, the sales prices of apartments increased by 9%, to €3,120/sq.m, and 3% for new apartments, to €3,910/sq.m. Foz and the Historic Centre were the most sought-after, with prices reaching €3,830/sq.m in both. The average discount and adjustment rate adjusted downwards to 6%; and like the capital, the average take-up time decreased by 1 month to 8 months.
Future supply seems to stagnate in the volume of projects licensed and a 21% drop in projects submitted for licensing.
Source: Cushman & Wakefield; SIR Ci
19
New and used
Sales price of apartments
Mouse hover to view the notes
LIVING
Lease of
apartments
NR. LEASED
UNITS
AVERAGE ABSORPTION TIME
AVERAGE MONTHLY CONTRACTED RENT
AVERAGE DISCOUNT AND ADJUSTMENT RATE
NEW
170
(-18%)
TOTAL
3,050
(-20%)
NEW
€21.4/sq.m
(+30%)
TOTAL
€15.8/sq.m
(+22%)
NEW
-3%
TOTAL
-3%
NEW
3 months
TOTAL
3 months
LISBON
NEW
70
(-38%)
TOTAL
450
(-27%)
NEW
€15.1/sq.m
(+16%)
TOTAL
€12.5/sqm
(+20%)
NEW
-1%
TOTAL
-3%
NEW
6 months
TOTAL
3 months
AVERAGE MONTHLY CONTRACTED RENT
NR. LEASED
UNITS
AVERAGE DISCOUNT AND ADJUSTMENT RATE
AVERAGE ABSORPTION TIME
PORTO
Source: SIR Ci
LIVING
Given the shortage of supply in Lisbon and Porto and with more stringent finance terms for mortgages, the appeal of the private rented sector (PRS) continues to grow, as well as the intention of developers to develop new built-to-rent (BTR) projects.
Even so, there is still an enormous scarcity of supply, which worsened in 2022, with a decrease in the supply of housing for rent above 40% in both cities, potentially due to the revival in tourism (and the conversion of residential units to short-stay rentals), and the consequent reduction in the number of apartments leased, as well as an increase in average rents.
Rental
Em estabelecimentos de alojamento turístico
Em estabelecimentos hoteleiros
Em estabelecimentos hoteleiros
Fonte: Estudo de Impacto Económico da Atividade de Cruzeiros em Lisboa, promovido pela Administração do Porto de Lisboa em parceria com a Lisbon Cruise Port e realizado pela Netsonda e Nova SBE
Rents in Lisbon reached €15.8/sq.m, for apartments (+22%), and €21.4/sq.m for new properties (+30%); with the Historic Centre continuing to take the lead, with a year-on-year growth of 31%.
In Porto, the average rental price increased by 20%, standing at €12.5/sq.m/month, with new apartments reaching €15.1/sq.m/month (+16%). Like Lisbon, the same area remained popular, with Foz commanding the highest prices.
The discount and adjustment rates also reflected the mismatch between demand and supply, adjusting between 3 to 6 p.p.; with the take-up time mostly falling by 1 month.
Market
LIVING
Rental price of apartments
Source: Cushman & Wakefield; SIR Ci
20
New and used
Mouse hover to view the notes
Rental
Market
LIVING
Like in recent years, and as a result of the continuous imbalance between demand and supply, student accommodation and CoLiving benefitted from significant development activity in 2022, with 2,170 new beds, spread over 7 units, all privately run. The LIV Student Campus Street in Asprela, with 775 beds, is now the largest accommodation in the country.
The ratio of number of beds per student has slightly increased to 13%, as did the predominance of private operators, who now represent more than a third of the supply.
24,700
13%
36%
Student Accomodation
/ CoLiving
TOTAL SUPPLY
(nr. beds)
PrivaTE OperaTors
PROVISION
RATE
(+10%)
(+1 p.p.)
Source: SIR Ci
21
Ratio between number of beds and displaced national and international students
Mouse hover to view the notes
LIVING
New openings
Source: Cushman & Wakefield
22
Next 3 years
Continuous increasing demand, particularly for purpose-built accommodation, continues to attract the private sector and encourage public investment, with the supply forecast for the next 3 years standing at 8,800 beds. Noteworthy future private supply includes the Coletivo de Azúrem, a project in Guimarães, with 630 beds, the expansion of Xior, with two U.Hub projects, and the entry into the market of The Social Hub (formerly The Student Hotel), with projects in Carcavelos (Lisbon) and in Bonjardim (Porto).
Main openings
Main private pipeline
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Student Accomodation
/ CoLiving
LIVING
In the senior housing sector, the number of available beds is rising, currently standing at 103,400. Even so, the ageing of the population contributed to the fact that the equipment ratio has not improved, remaining at 14%.
Under these circumstances, complemented by a high occupancy rate and scarcity of quality supply, there is increased activity by the private sector, particularly with the entry in the market, in recent years, of specialist international companies, such as the ORPEA group, which in 2022 opened a 100 beds unit in Braga.
Looking ahead, for the next three years, an increase of 800 beds is projected from among the main private operators, with most choosing to develop projects of more than 100 beds, like DomusVi that will open 3 residences (in Leiria, Oeiras and Estrela).
103,400
92%
26%
Senior
Living
TOTAL SUPPLY
(nr. beds)
OCCUPANCY
RATE
(+1%)
(+2 p.p.)
Source: GEP; INE; ACSS
23
Ratio between the number of beds and population aged 80 and over; 2021 population
PrivaTE
OperaTors
14%
(=)
EQUIPMENT
RATE
Mouse hover to view the notes
LIVING
Source: Office for Strategy and Planning – Social Charter (excludes Madeira and Azores)
Next 3 years
Supply
Main Private Operators Pipeline
Main Private Operators Openings
24
Source: Cushman & Wakefield
Senior
Living
Mouse hover to view the notes
LIVING
Trends
RESIDENTIAL MARKET AN OPPORTUNITY FOR INVESTORS
STUDENT ACCOMMODATION OPPORTUNITY
SHORTAGE in FUTURE PIPELINE IN STUDENT ACCOMMODATION
The residential market in Milan and Rome is characterized by an ageing stock, which makes for a very interesting and attractive opportunity for investors to develop new product that match the new needs of Living. There is a growing demand for high-quality spaces recognize a value premium on new products both BTR and BTS.
At a national level, Milan has seen more steady growth in prices and rents. However, Rome remains the largest market in terms of the number of purchases, sales and new rentals. For both cities, there are two signs of market vitality: shortened periods for selling and/or renting apartments and reduced discounts on the asking price for second-hand products.
The student market in Italy, with the exception of the last academic year, has seen steady growth in recent years, particularly in the number of international students, which has doubled in the last decade. The student accommodation market is very attractive to investors who see the development of modern student accommodation as an interesting opportunity given the high potential demand from foreign and international students (c. 500,000) and the low current supply of beds (c. 70,000). The coverage of beds in relation to potential demand is 14%, one of the lowest in Europe.
Milan and Rome are the two main student markets in Italy, with circa 28% of Italian students and about 35% of international students together. The supply is low and the future pipeline in both cities is underestimated compared to the potential demand for beds.
MILAN AND ROME LEAD THE ITALIAN MARKET
DEVELOPMENT
Development &
Living
Purchase of buildings for refurbishment or land for development
Mouse hover to view the notes
Main urban development and regeneration deals
Source: Cushman & Wakefield
25
Activity in the urban development and regeneration sector picked up in 2022 growing by 48%, compared with 2021, with a total transaction volume of €786 million, spread over 55 deals. Amongst these, the development sites included in the Crow project (among other, Vale do Lobo), sold at the end of last year by ECS Capital to DK, for an estimated price of €200-250 million; and the purchase by AXA IM - Real Assets of Colombo Tower 3, for €40-45 million, stand out.
26
Information based on internal and public sources
PROMOÇÃO
Aquisições de edifícios para reabilitação ou terrenos para promoção
Real estate projects under licensing
Source: Pipeline Imobiliário Ci
Regarding future supply, during the last year 7.2 million sq.m were submitted for licensing in mainland Portugal, spread over more than 21,000 projects, reflecting increases of 11% and 21%, respectively, when compared with the same period of the previous year. In terms of area, although most of the projects are for residential use (73%) and new construction (78%), the office and tourism sectors benefitted equally from development and refurbishment projects, with each category accounting for around 50%.
Baseada em fontes internas e públicas
Development &
Living
DEVELOPMENT
Lisbon
Aquisições de edifícios para reabilitação ou terrenos para promoção
Real estate projects licensing
Source: Pipeline Imobiliário Ci
Licensing of construction projects in Lisbon followed an asymmetric pattern, with a decrease related to projects submitted and an increase in those already licensed. Regarding the former, there was still an increase (+13%) in the number of projects submitted, to close to 310. Contrary to country-wide data, there was again a balance in terms of the type of construction, with works in existing buildings marginally dominant.
Baseada em fontes internas e públicas
Real estate projects under licensing
337,200 sq.m
(-25%)
997,300 sq.m
(+91%)
LICENSED
Submitted for licensing
Licensed real estate projects
Source: Pipeline Imobiliário Ci
Próximos 3 anos
The area of licensed projects doubled, with the retail sector taking the lead, with 449 thousand sq.m, swayed by the permitting for the refurbishment and expansion of Centro Colombo.
Construction costs continued to escalate, with average costs in Lisbon ranging from €1,450/sq.m to over €1,850/sq.m, in new construction, and from €1,700/sq.m to over €2,000/sq.m in refurbishment.
Construction costs by segment
Source: Cushman & Wakefield
DEVELOPMENT
Lisbon
Aquisições de edifícios para reabilitação ou terrenos para promoção
Real estate projects licensing
Source: Pipeline Imobiliário Ci
Porto also showed an unlikely trend concerning the area of construction submitted for licencing and the licensed area.
The former decreased by 28%, with the number of projects decreasing by 10%, to around 275. In Porto, new construction prevails, representing 72% of the total area.
Baseada em fontes internas e públicas
Real estate projects under licensing
214,500 sq.m
(-28%)
353,400 sq.m
(+6%)
LICENseD
Submitted for licensing
DEVELOPMENT
Porto
Licensed real estate projects
Source: Pipeline Imobiliário Ci
Próximos 3 anos
Regarding new licensed area, the residential sector is the most popular, with a balance between new development and refurbishment.
Additionally, in Porto, construction costs continued their upward trend, ranging from €1,400/sq.m to over €1,800/sq.m in new construction and from €1,500/sq.m to over €1,900/sq.m in refurbishment projects.
Construction costs by segment
Source: Cushman & Wakefield
DEVELOPMENT
Porto
Trends
Residential development will continue to be a priority
Pressure on construction costs may be easing
The significant imbalance between demand and supply, especially in the mid-end segment, will continue to drive developers and investors to adopt innovative solutions to develop more homes for the middle class.
The recent measures announced by the government to create more residential accommodation, do not include tax benefits for new construction nor the optimisation of licensing time for allotments, so several larger-scale residential projects are likely to continue to be delayed.
Portugal is currently a very popular destination, so investment in residential projects for the high-end and luxury segments, fuelled by growing demand from international buyers, is likely to continue.
The need to develop more practical, modern and, above all, environmentally and energy-efficient offices will become increasingly evident, freeing up more buildings for conversion into housing or tourism in central locations, fostering a new cycle of urban regeneration in the cities of Lisbon and Porto.
A slight slowdown in the rising costs of construction materials and labour costs can already be observed, which may continue provided there is no global catastrophe, favouring the development of projects targeted at the mid-end housing segment.
The emergence of a new generation of offices
DEVELOPMENT
INVESTMENT
Commercial Real Estate
Investment
The first half of the year was marked by a sharp slowdown in CRE volumes which reached €2,25 Bn, -63% on the same period of 2022.
High levels of inflation, credit crunch, raising cost of financing, rising returns on state bonds, general uncertainty on future pricing and the structural issues facing the office sector – are all deterring sellers from starting negotiating deals.
Foreign and domestic capital accounted equally for this result.
TOTAL VOLUME
Foreign Investment
logistics
€2,25Bn
(-63%YY)
H1 TOTAL
VOLUME
50%
25%
Source: Cushman & Wakefield
Click over to view the notes
27
Institutional investment in completed and income-producing real estate properties
FOREIGN
INVESTMENT
Best performing sector
Investment by semester
Source: Cushman & Wakefield
28
In case of a range in the “Value (M€)” column, the calculation of this indicator is based on the range’s average value
Investment by sector
INVESTMENT
29
With ca €570 M the Logistics sector proved to be more resilient than other asset classes, maintaining good investor interest and accounting for 25% of the overall investments; the largest deal was the sale of Chiari logistic park bought by JP Morgan for around €70 M.
Alternative asset classes, (hospitality, healthcare and living) accounted for 35% of investments, with the largest deal this semester – Aparto Milan Giovenale, bought by Hines for roughly €120 M – coming from the Living sector. Within these sectors lack of product acts as a brake for volume expansion while interest is still high. The opportunity to create best-in-class space and value through leveraging asset management and development expertise remains strong.
Offices have emerged as a key worry for the global real estate market as the combined impact of rising rates, structural unicyclic issues such as the shift to hybrid working and pressure to upgrade buildings’ energy efficiency hits landlords. Consequently, investment in this sector stood at an all-time low, just below €400 M, 17% on totals and declining 80% on figures for H1 22.
The retail investment volume is declining, standing at ca €200 M in the first semester. Very few opportunistic investors are active in the market. Timing to close a deal has increased substantially as debt suiting the investors’ returns is hard to find. Few deals related to secondary stabilized shopping centres are ongoing, expected at double-digit yields.
Mouse hover to see the notes
2023 H1
2022 H1
Main investment deals
Commercial real estate component
INVESTMENT
Mouse hover to see the notes
Overall, average deal size is between €20-50M, 26% in terms of volume equal to 28 transactions.
The majority of transactions continues to be concentrated in the northern part of the country especially for Logistics, Living and Office sectors.
29
30
32
33
Nr. of keys of the transacted hotels (circa 85% of the commercial real estate component, as it excludes the golf courses)
Unit value by keys (€/keys)
Unit value by keys (€/beds)
INVESTMENT
Prime yields move out further for all asset classes:
- Offices reached 4.00% in Milan, 4.25% in Rome;
- Retail High Streets +50bps since January, with country prime; at 4%, higher (+75 bps) in secondary markets;
- Shopping Centers prime yields stood at 6.5% (+15 bps);
- Retail Parks stable at 6.75%;
- Prime Logistics reached 5.00%.
Source: Cushman & Wakefield
Investimento institucional em produto imobiliário acabado e de rendimento
Prime
Yields
OUTLOOK
Repricing started in Q4 2022 continued in H1 and will likely continue until the end of the year with further interest rates hikes expected.
INVESTMENT
Trends
THE "PRICE DISCOVERY" PHASE CONTINUE
NEW MARKET CYCLE
OPPORTUNITY
Investors are taking time to process the current business environment and understand where the new equilibrium lies.
In the current market conditions full equity buyers are adopting a highly selective approach with yields still below investors’ expectations
Real estate is entering a new era where the operational factor and a longer-term perspective will become increasingly important in pricing an investment.
Distressed opportunities can unlock value, a trend mainly evident in the hospitality sector
The higher cost of financing could force some investors to exit thus keeping the market moving.
Obsolescence is key:
The repositioning of ageing stock, addressing the climate crisis and ESG values is crucial for future proofing investments.
(CLICK HERE FOR THE OBSOLESCENZE REPORT)
MISMATCHED EXPECTATIONS
SUSTAINABILITY
Commercial real estate certified buildings
The Portuguese real estate market continues to see growing interest to incorporate sustainability concept, as well as ESG criteria, in decision-making processes. In light of the increased regulation at European level, with the implementation of relevant policies and strategies, obtaining certificates such as Building Research Establishment Environmental Assessment Method (BREEAM), Leadership in Energy and Environmental Design (LEED) and WELL certification, in addition to the application of taxonomy to properties to classify their sustainability, is rapidly taking precedence.
Source: BREEAM and LEED
Portugal currently has several buildings in the commercial real estate market in different phases of certification (from design to operation). There has been a marked rise, over the last three years, of buildings awarded sustainable building certificates, for new construction / refurbishment and buildings in use.
34
New certification or renewal; only includes the projects listed by the respective entities (some projects are anonymous and therefore not published)
Mouse hover to see the notes
Commercial real estate certified buildings
BREEAM has taken the lead, with close to 80 certified buildings, 90% of which are related to in use and more than half are in the retail sector. More than 30 buildings have LEED certification, and this is equally distributed between new construction / refurbishment and in use, mainly in the office sector. In terms of future certification, data of which is only available for LEED, currently almost 50 buildings are registered.
Source: BREEAM and LEED
The WELL certification is focused on the use of the building and the well-being of its users. Although the implementation of this rating begins in the construction phase, it is only obtained in the operation phase, and there are yet no buildings with this certification. Even so, with nearly 40 projects registered, all in the office sector, it is expected that this situation will change shortly.
35
New certification or renewal; only includes the projects listed by the respective entities (some projects are anonymous and therefore not published)
SUSTAINABILITY
Mouse hover to see the notes
Trends
Response to climate change
Value chain integration
Reporting of non-financial indicators and classification of investments regarding sustainability
Reduction of the carbon footprint as a climate change mitigation measure, in order to comply with the goal to global warming to 1.5ºC. This reduction may involve the choice of construction materials to reduce embodied carbon locked in new buildings, or by measures to reduce energy consumption in the operation of existing buildings.
Energy audits, Life Cycle Analysis or tools such as CREEM, which determine the carbon obsolescence of a building, are increasingly used and necessary, especially for existing real estate.
Workspace trends in 2023 are dramatically different from the pre-COVID-19 period. In this ever-changing environment, the valorisation of human capital continues to be a priority, and a determining differentiation factor. Consequently, there is a clear trend towards offices obtaining sustainability certification (LEED or BREEAM) and promoting the health and well-being of employees (WELL).
The market clearly prefers to buy or rent properties with these certifications, and this requirement has become an integral part of the ESG policies of large companies.
The residential market, especially the luxury segment, is also starting to adhere to sustainability certifications, with a focus on BREEAM.
The value chain is taking on considerable importance throughout companies’ activities, as these impacts need to be integrated into the reporting of non-financial indicators. Companies are now no longer analysing their own activity, but are beginning to consider the wider impact, for instance through their suppliers.
With the publication of the recent EU regulation on the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR), there is a growing focus on the classification of investments, in terms of sustainability, through the Taxonomy criteria. However, the market is still trying to understand the necessary changes and next steps, and how companies may incorporate ESG principles into their activity.
Valuing human capital
SUSTAINABILITY
MARKETBEAT ITALY OVERVIEW,
H1 2023
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries. In 2022, the firm reported revenue of $10.1 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), Environmental, Social and Governance (ESG) and more.
To learn more, visit www.cushmanwakefield.com
© 2023 Cushman & Wakefield. All rights reserved.
The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
RAFFAELLA PINTO
Head of Business Development Italy
raffaella.pinto@cushwake.com
ANNA STRAZZA
Associate, Research Italy anna.strazza@cushwake.com
GWENDOLYN FAIS
Consultant, Research Italy gwendolyn.fais@cushwake.com
INVESTMENT
David Lopes
david.lopes@cushwake.com
BUSINESS SPACE & RETAIL INVESTMENT
David Lopes
david.lopes@cushwake.com
ESG
Ana Luísa Cabrita analuisa.cabrita@cushwake.com
ASSET SERVICES
Bruno Silva
bruno.silva@cushwake.com
RETAIL ASSET SERVICES
André Navarro
andre.navarro@cushwake.com
PROJECT MANAGEMENT
Carlos Pueyo
carlos.pueyo@cushwake.com
VALUATION & ADVISORY
Ricardo Reis
ricardo.reis@cushwake.com
BUSINESS DEVELOPMENT
Isabel Correia
isabel.correia@cushwake.com
FRANCESCA NEGRONI
Bid Management
and Retail Research, Italy francesca.negroni@cushwake.com
CARLA NASINI
Marketing Executive, Italy
carla.nasini@cushwake.com
Graphic & design by Carla Nasini
Graphics and design by Carla Nasini
