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The managed assets of Italian real estate funds have grown (+2.8%)

26 November, Il Sole 24 Ore

Italian property funds have reported a slight increase. According to Scenari Immobiliari, the managed assets are expected to reach 55 billion euro in 2018 (+2.8% from the previous year) through 430 funds, and they’ll reach 56 billion in 2019. The promised privatisation of public assets, if implemented, might favour new and established real estate funds, as it happened in the past decade.

There is no doubt of the essential role of asset managers as a catalyst for investments in Italy and as a vehicle for international investors to acquire assets in the country. But experts believe that the scheme should be updated and made leaner and less subdued to bureaucracy.

However, the growth is rather small if compared to the European average. The managed assets of real estate funds in Europe is meant to exceed 626 billion euro by December 2018, reporting a 6% increase from the previous year. On the overall, the managed assets have doubled from 2010.

The direct real estate assets in Italia are assessed to be over 60 billion euro, including development operations, with a 4.3% increase from 2017. The number of products on the market has also increased, having gone from 305 in 2010 to 430 at present. Other ten new real estate funds are planned to be launched in 2019.

The favourite asset class are offices, attracting 60% of the investments, followed by retail (20%), while only a small part is dedicated to residential assets (9%), which have become an actual asset class for institutional investors only recently, plus logistics (4%) and developments (3%). The indebtedness of funds has been consistently decreasing and dropped to 23 billion euro with a 38% impact on the assets, while it was 57% in 2020.

If we consider, besides real estate funds dedicated to big as well as retail investors, also Siiq, namely listed real estate companies, and Sicaf, incorporated investment companies with fixed capital, the Italian financial real estate industry is worth approximately 69 billion euro, whereas it was 62 billion euro in 2017. The listed companies and the Sicaf alone are worth a 0.5 billion-euro NAV (net asset value), while Siiq represent 4.3 billion.

The listed real estate companies reported a 55% decrease in their capitalisation compared to the previous year, having gone from 0.3 billion euro on 30th June 2017 to 0.1 billion on 30th June 2018. Such a decrease is due to the delisting of Prelios, as the company successfully got a public offer in the first months of 2018 following the acquisition by the American group Davidson Kemper.

On the contrary, the listed real estate companies registered an increase in the discount on Nav due to the reduction of the Nav value and to the reduced capitalisation in comparison with 2017.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi