05 February, Milano Finanza
2017 was a year to remember for the commercial properties sector. That’s what the figures from Bnp Paribas Re Italia say, reporting a year closure with investments equal to approximately 11.1 billion euro, growing by 25% from 2016. This positive trend has been going on for several years already, suggesting a recovery of the national economy and the renewed appeal of Italy abroad. In fact, 70% of the investments in commercial properties originated abroad. According to Bnp Paribas Re Regarding, the office segment contributed the most to the total investment volume: about 4 billion in 2017 (35% of the total), aligned with the previous year results. However, Re/Max Italia reports a general fall of the values in the segment, with discounts up to 4% compared to the pre-crisis period and with selling times around 8-9 months. Foreign capitals are significant, representing 70% of the total in the office segment, even though the Italian property and private funds are back.
Logistics are also doing well. According to Bnp Paribas Re, the segment has grown by 72% with total transactions valued 1.2 billion. However, according to Tecnocasa, the segment has reported a contraction of selling times of 1.7% in the first part of 2017, as well as a fall of 0.3% in rentals. The picture is not all negative though, considering that this condition favours the purchases by artisanal companies (22.3% of the demand, according to the portal) which could not afford to buy for a long time. Regarding laboratories, Tecnocasa has reported in the first part of 2017 a price contraction of 1.5% and of 0.5% for rentals. The requested properties are not bigger than 200 Sq m and are mainly destined to artisanal businesses, gyms and leisure-cultural associations.
The less traditional segments are also dynamic. For instance, the hotel segment has seen transactions for 1.1 billion euro, 50% more than 2016 (Bnp Paribas Re). While assisted living, the healthcare sector, and student housing are consolidating thanks to the low risk and the consistent returns, according to Jll. These sectors have grown throughout 2017 by 27%, with investments for 1.9 billion euro.
Concerning retail, Bnp Paribas Re has registered investments for 2.5 billion euro in the year just concluded, more than half of which are in the high street, whose values spiked by 170% on a yearly basis. However, the segment is in countertrend. According to Jll, the segment reported in 2017 investments lower by 23% compared to the previous year. The decrease is due to the rise of the food & beverage brands which have more flexible requirements than other merchandise categories.
Considering Milan and Rome, Immobiliare.it reports an increase of the demand of 7% against a decrease of availability of 4% in Milan, the combination determines an increase of prices of 8% for commercial properties. According to Bnp Paribas Re, the investment volumes in 2017 were equal to 3.6 billion euro, for a yearly growth of 17%. Anyway, the focus is still on offices, that get 60% of the investments, not only for central locations but also for requalified ones, these latter offering cheaper rentals.
Whereas Rome has seen its investments falling by 22% compared to 2016. According to Bnp Paribas Re, the reason is the not so excellent conditions of the buildings, causing a drop of the purchasing prices, and the consequent fall of values (about 2% in the last six months). Therefore, transactions concentrate on vacant properties to be reconverted: they’re cheaper and easier to customize, and mostly located in the city centre where tourism is still the first source of income.
Finally, what is the outlook for 2018? Pierre Martine, Ceo of Jll Italia, comments: “From a European point of view, the growth of investments in the commercial property segment places Italy in a favourable position. The Italian market is a mature market, sophisticated and diversified in terms of intended use. The positive trend has been going on since 2012 and with double digits, and this makes look with optimism at 2018”. This year, according to Jll, the primary role of offices should be confirmed, along with the emerging trend of logistics, Milan will continue to be the main driver of the sector, while Rome will gradually grow thanks to new requalification and relaunch opportunities.
Source: Milano Finanza
Translator: Cristina Ambrosi