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The cities attracting investments. Florence surpassed Rome and is just behind Milan

22 February, Il Sole 24 Ore

Florence, the cradle of the Renaissance culture which will never go out of fashion, surpassed Rome in terms of investment attractivity placing just after Milan. The results come from Nomisma, which gathered the data in Italy2Invest-Urban Data Intelligence, its integrated platform measuring the attractivity, competitivity and wellbeing of the Italian market in order to support investors and policymakers. A novelty worth to see in detail.

The Italy2Invest indicator

The general index generated from the analysis of the data included in the Nomisma platform shows a score from 0 to 100 placing Milan first with a rating of 75.2. Florence ranks second with a score of 71.4, followed by Bologna and Turin. Rome is only fifth with a score of 63.5. The city ranks 22nd in the Municipality chart, where Milan and Florence are again respectively first and second. The promoters of the Capital in terms of investment attractivity will undoubtedly disagree with this chart.

To give a more precise idea, we must clarify that the general index includes 250 indicators referring to 7,998 Italian cities. The 2018 overview shows a total average score of the various towns equal to 52.7 for 2018, 60.8 for the provincial capitals only and 63.4 for metropolitan cities. The average incorporates a minimum value, referred to all the cites, equal to 28.8, and a maximum value of 75.2, referred to Milan. Among the provincial capitals, Rome ranks 17th, surpassed by cities such as Como, Pavia, Monza and Padova.

Florence’s appeal

The Nomisma general index is based on the identification of eight main “domains”, 601 indicators and 22 information resources, both public and private. Florence not only ranked second but also reported the highest performance, with a positive spread of 17.4 points in comparison with the average of provincial capitals and of 12.6 points compared to the average of metropolitan cities. Three “domains” contributed to such high score: tourism, real estate market and services, and consumptions. Florence’s touristic sector scored 100, while real estate scored 90.

The main four parameters measuring Florence’s excellent ranking in tourism are the number of business for Sq km, the total tourists’ arrivals for Sq km, the impact of international tourism and the utilisation rate. Visits in Florence were 3,826,699 in 2017 (this is the period analysed by Nomisma), reporting a 6.6% growth from 2016; presences were 10,056,157 (+7.74%), and the average duration of stays was 2,63 nights.

The property market

Concerning this domain, Nomisma took into consideration the prices of shops and the intensity index of the real estate market. Specifically, the weighted average price of shops in Florence in the second quarter of 2018 was 2,766 euro/Sq m, against the 2,361 euro/Sq m of houses and the 2,136 euro/Sq m of offices. The weighted average rents were 182 euro/Sq m/year for shops (the numbers refer to the second quarter of 2018), 118 euro/Sq m/year for houses and 105 euro/Sq m/year for offices.

For what concerns services, the Nomisma indicator considers the number of nursing homes and hospitals in relation to the population, the Municipality’s expenditure concerning support to families and children and the Municipality’s expenditure concerning social protection and support to homeless people. Florence places very high in the chart for this indicator. For instance, nursing homes and hospitals per Sq km are equal to 0.74 in comparison with the average of 0.41 of metropolitan cities and 0.32 of provincial capitals.

A new prospect

The general index Italy2Invest offers a new outlook to assess the attractivity of Italian regions, and it breaks with the tradition of the Milan-Rome axis generally used when talking about real estate deals, introducing investors to a new point of view. Large players may disagree, but it’s important to stress that cities like Florence are currently the object of important deals such as the acquisition of the Four Season’s hotel. Not only, the city is also undergoing important requalification interventions, as well as important real estate developments.

Big requalification projects in Florence

Hotels, luxury residences, shopping centres and offices are the main requalification opportunities in Florence, where the urban renewal process started in 2015. According to the City of Florence and the Region of Tuscany, the potential investments are assessed at around 1.5 billion euro, for requalification projects covering a total surface of 800 thousand Sq m. Among the most interesting projects, there are Villa Mondeggi, the Sant’Orsola monastery, the Lupi di Toscana barracks, Officine Grandi Riparazioni (“the repair workshop”) and the former military hospital San Gallo.

Villa Mondeggi

An agricultural and historical property just outside Florence, in Bagno a Ripoli, it offers breath-taking views for a total surface of 170 hectares, 46 olive groves, 22 vineyards, and 34 wooded areas. The main villa covers 6 thousand Sq m, while farms occupy other 3 thousand Sq m. The construction dates back to the 15th century. As decided by the city administration, the property’s use intended is mixed, from hospitality to residential and agricultural production. The asset was put on auction at the end of last year. The public auction will take place on 1st March at 7 pm.

Sant’Orsola monastery

This requalification project concerns a 5,356 Sq m area extendable to 17,500 Sq m. The area dates back to the 16th century. The total investments for touristic use amount to 35 million euro. The property is located in the heart of the old town, close to the Medici Chapel, the Cathedral and the San Lorenzo market. The area has been completely neglected. It will become a multifunctional centre which will also host the Bocelli Academy Music School along with a guesthouse and a 17 thousand Sq m public square. The proposal for the site’s requalification arrived at the beginning of February, and it’s currently being assessed by the city administration.

Lupi di Toscana barracks

Its intended use will be disclosed in detail based on the offers and the ideas which will be submitted. The site concerns an area of 34 thousand Sq m, with the addition of approximately other 20 thousand Sq m, for a total surface of 53 thousand Sq m to be requalified and investments for about 100 million euro. The site benefits from excellent connections thanks to the tramway line nearby. It’s already certain that the project will include a residential component, comprising social housing dedicated to young people and mixed-use assets. In January, the relaunch process of the barracks was accelerated, as announced by City Councillor for urban planning Giovanni Bettarini, after having met with the experts and the winners of the bid.

“We’ve chosen to bring forward at the same time the recovery plan and the related variant to the planning regulations – said Bettarini – in order to accelerate with the schedule and to recover quickly such a precious metropolitan area. In April, the urban planning commission will check the status of the project before preparing the final documents, so that we’ll be able to make the last amendments based on the requests and remarks”.

Officine Grandi Riparazioni

The potential investment amounts to 16.5 million euro concerning an area of 82 thousand Sq m, 54 thousand of which will be requalified. The complex is located in the Porta al Prato area, which is currently vacant, near Teatro dell’Opera designed by the architect Paolo Desideri and the Leopolda station, not far from the city centre. The asset has a mixed intended use including hotels and residences, commercial spaces and services.

Old San Gallo hospital

The buildable area covers 16,200 Sq m. The property was built between 1100 and 1700. The potential investment amounts to 45 million euro. This asset is located in the old town, which is a Unesco heritage site.  The project implies the mix of functions such as hotels, residences and public spaces. As shown in the preliminary masterplan, there will be hotel suites and luxury apartments overlooking the San Marco Dome.

There are also plans to implement a bus terminal close by for a surface of over 11,800 Sq m, whose intended use can’t be modified, but for which the bus company Ataf is ready to pay a yearly rent of 3.1 million euro.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

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