21 October, Milano Finanza
The recovery of the Italian property market finds the confirmation also in the numbers of properties for office use. According to Scenari Immobiliari, the market reached in 2016 114 billion euro in total, the turnover for this segment is estimated around 6.4 billion euro (+1.6% in 2015), and it’s expected to reach 6.6 billion. It’s meant to grow further in 2018 (+5.3%). This growth, however, is not evenly distributed, it concentres instead exclusively in some cities: Milan and Rome in particular, followed by Turin and Bologna. “Milan and Rome are the first destinations at a national level for what concerns prime offices, with net returns of 3.5% and a high demand from the investors”, explain s Gabriele Bonfiglioli, Coima Investment Management managing director, the independent company active in the management of property funds. Today, Coima Sgr manages 19 investment funds, with over 5.5 billion euro of operational investments, management mandates included. “The market has a good growth potential”, highlights Bonfiglioli. “In Milan, the prime rent has risen by 6% from 2016, setting around 530 euro/Sq m, with a demand concentrated in high-quality properties, which represent a small part of the market”. Concerning purchasing, there is still a big gap in prices between Milan, with the requested price for prime offices of 13 thousand euro/Sq m, and cities like Paris (26 thousand euro/Sq m) and London (over 40 thousand euro/Sq m). The appeal of Milan as a business city emerges from the increase in surface sold, which is expected to remain stable for this year (+8% approximately), reaching 326 thousand Sq m, with an absorption of 73.1%. “The most sought after are the properties involved in the big urban renovation plans that have transformed the city: areas like Porta Nuova, Varesine, Maciachini center, Parco Vittoria, Lorenteggio, Citylife”, stresses Mario Breglia, Scenari Immobiliari president.
The situation in Rome is different. Here, the office market is characterised by a little offer of new products, while those newly built struggle to be sold. At the moment, say the experts, the market addresses to private companies, while in the past the main client was the public sector. In 2016, however, the surface sold was 174 thousand, 6.4% more than 2015, with an absorption of 54%. The turnover has risen (+1.4%), reaching 1 billion euro. “The demand is concentrated in the central areas, where the prime properties are, and in the Eur area, the management district of the city”, believes Breglia. Some projects, however, are still stuck, polluting the market. An example is Europarco in Eur, with over 20 thousand Sq m for the Atac headquarters, of the 36 thousand Sq m of the Eni headquarters, still to be completed.
Source: Milano Finanza
Translator: Cristina Ambrosi