22 November, Milano Finanza
Real estate investments will not reach 11 billion as they did last year thanks to extraordinary operations which are not easy to replicate. They won’t either reach the threshold of 9.5 billion reported in 2016. However, 2018 will be filed as a very important year for the Italian real estate market. Even though the outlook at the end of the third quarter was for 5.3 billion, investments will likely reach 8 billion by the end of December. It will be possible to achieve such result despite some external factors that are worrying investors: the tensions between the two majority political parties, the clash with the EU at its highest due to the rejection of the budget proposed by the Government, the threat of the exit from the EU, the anything but brilliant economic outlook, the end of the quantitative easing, the less favourable interest rates and the high volatility of the stock market.
But, as emerged from the Italian Real Estate Conference organised by the law firm Legance on 19th November in London, “there is still great interest from international investors in Italy’s real estate and NPL markets. This is a very positive sign for the country”, commented the lawyer Filippo Troisi, senior partner of the firm. The event saw the participation of over 200 managers from the main players in the sector. Managers from Pimco Europe, Blackstone, Tristan and Partners Group, and other representatives of Italian companies took part in the panel discussions. It emerged from the debate a cautious approach of the international players. Rather than running away from Italy, investors are waiting and assessing their plans. This has led onto a slowdown of transactions, which are being defined and carried out nevertheless.
The outlook concerning the growth of the country is negative, with the inevitable depreciation of the real estate assets. If this re-pricing concerns also rents and returns, there may be sooner or later a decrease even in the average transaction prices. In such a scenario, international players might be interested in the Italian market for the opportunity of very convenient operations in the immediate future with discounts on the property values.
While some operators are aiming at other markets, like Cyprus for instance, others as the Apollo fund are betting on Italy. After having acquired the Odeon cinema from Berlusconi’s Fininvest, the fund also bought the real estate development in the Gran Sasso area in Milan from Amissima for over 50 million without using bank debt. The Australian LendLease is currently working on Santa Giulia of the company Risanamento and on Arexpo. Chinese and German operators are competing for five factory outlets worth 700 million put on the market by Blackstone. The Kildare group acquired other three shopping centres in northern Italy, whereas Enel stopped the auction for the sale of a real estate portfolio for the value of 350 million.
Source: Milano Finanza
Translator: Cristina Ambrosi