Tag: investments

Dla Piper: good performance of Italian real estate, but NPLs are still an issue

06 November, Bebeez

From the latest summit organised by Dla Piper, it emerged that the Italian real estate market can still offer excellent results with returns for 6.8%, although NPLs remain an issue to be solved.

Concerning investments, offices are the most attractive segment (71.9%), followed by retail (52.6%), logistics (36.8%), residential (33.3%), hospitality (28%), student housing (19.3%), senior living (8.7%) and infrastructures (3.5%), while 10.5% of the investors opted for other sectors.

In 2020 investments will continue focusing on offices (64.5%) and retail, although the market plummeted from 52.6% to 25.8%. Milan is still the investors’ primary market (80.9%), followed by Rome (65%).

Source: Bebeez

Translator: Cristina Ambrosi

Tecnocasa: investments in homes for rental have been stable in 2019

01 October, Metro

In the first semester of 2019, investments in Italy for properties for rental have been equal to 17.9%, while purchases for main residences and holiday homes have been respectively 76.6% and 5.5%. Buyers mostly focus on two-bedrooms apartments (37.6%), followed by three-bedroom properties (20.5%), and on detached and semi-detached houses (18.7%). Purchases in properties for rental concentrate on one-bedroom apartments (35.6%) and two-bedroom apartments (27.5%).

Source: Metro

Translator: Cristina Ambrosi

A market in good shape

18 April, Milano Finanza

Only the rise of prices is missing. Apart from that, all the other indicators show the good shape of the Italian real estate as they’ve improved in the last three years. Moreover, thanks to the impulse given by international capitals, non-residential investments (offices, commercial spaces, logistics, hotels, assisted living facilities) have registered a new record in the last two years reaching over 11 billion euro and surpassing the pre-crisis figures. Besides transactions, also the other parameters have improved: the demand has grown, even reporting multiple buyers for the same property (for the first time since 2007), the while times to sell and the discounts applied have reduced. Finally, also the rental market is performing well, with the demand growing and stable prices if not increasing, despite the broad offer.

The price issue is certainly not secondary. Not only because is the most evident sign, but also because is a reassuring factor for buyers and investors. This weakness has many reasons that only depending on the current market conditions. Firstly, the Italian real estate didn’t collapse with a 50-70% fall in a very short period of time, like other countries did. In the Italian real estate market (not only residential), prices decreased very slowly and gradually, falling on average by 30-35%, and this trend is not over yet. The lack of a dramatic plummeting of prices (which erased all the excesses) reflected on transactions: the residential transactions were more than halved (from 850 thousand during the highest point to 400 thousand in 2012), while those in the service sector shrank to 2 billion, with very little liquidity and a strict selection. All this is just a bad memory now. Nowadays, what slows down the market is an incomplete economic recovery and not equally spread throughout the country. However, the main weakness is represented by inflation, still at minimum levels, which was the fuel of the real estate market in the past.

Increase of prices in 2019-2020

And now? The question is whether, when and how the market will be able to overcome these limitations and how the future market will look like. According to Nomisma, for a full price recovery, it will take another couple of years: 2019 for residential (+0.4%) which will reach +0.9% in 2020, same for retail (+0.5% and +1% in 2019-2020). Whereas offices will remain stable in next year and they’ll grow by 0.5% in the following year. This outlook considers only the first 12 cities, while for the national average times are even longer. In the meanwhile, the market will get stronger, starting from the most solid cities where prices have resumed growing. These are the centre and semi-centre of Milan and Rome for what concerns residential, and the area of Milan for the other property types. The market is recovering also in Florence, Bologna and Venice.

Rentals or sales. What matters is the quality

The persistent uncertainty regarding prices has changed the attitude of the potential buyers which have become increasingly selective. The past few years showed how the properties that resisted better the recession were the high-quality ones in terms features: well-located, ideally served by the metro system, close to schools, shops and other services, of medium dimensions, in discrete conditions and with good finishing. In addition, spaces have must be smartly distributed, eliminating unnecessary elements such as entrances and long corridors, preferring properties with two bathrooms and a spacious living room. After all, who buys a house to live in long-term wants to make sure that it satisfies his/her needs, whereas who buys with the idea of selling in a couple of years opts for something easy to resell without losing in value. The same is valid for who buys to rent, encouraged by the rise of short-term rentals: only a property with the right characteristics can grant a steady stream of tenants and therefore a good profitability.

The same logic is valid for offices, commercial spaces, hotels and so on. The price of a property is determined more than ever by its features: energy efficiency, environmental sustainability, anti-seismic property, etc… These are the conditions to easily resell the property in the future, taking into account the lease prices in the meanwhile. For instance, in Milan, the profitability for offices doesn’t go above 4% and the highest rental price amounts to 500-550 euro/Sq ma year. Starting from these figures, the property price is calculated. It’s not by chance that in Milan, as in the rest of Italy, it’s easier to sell properties already rented, and it’s more likely to develop an area if this has already a potential tenant with a lease already signed. This is what has recently happened with the Libeskind tower in City Life in Milan -which will be occupied by PwC – along with the other tower nearby launched by Kryalos , the buildings that are going to be developed by Beni Stabili in the south of Milan and will be leased to the insurance company Aon, just to name a few  examples.

In conclusion, something is moving again in the market. The investors, especially international ones, are appreciating again Italian real estate, and are ready for action.

Source: Milano Finanza

Translator: Cristina Ambrosi

Allianz will invest in Italy

12 April, Il Sole 24 Ore

The big insurance groups are back investing in the Italian real estate market, after a period of absence.

This is the case of Allianz Real Estate. After the experience with Citylife, where the company exited from the shareholders and acquired what is now called the Allianz Tower, designed by Arata Isozaki and Andrea Maffei, Allianz is now ready to evaluate other investment opportunities in Italy.

“Our focus is still on core and added value properties in the main cities of the world”, stresses Alex Gebauer, head of Western Europe for Allianz Real Estate.

Today, the group holds a real estate portfolio valued 56 billion euro, having grown from the 16 billion in 2008. Allianz has current assets under management in Italy for 3 billion euro, including direct properties and joint ventures.

“Our strategy in Italy is based on three main paths – explains Donato Saponara, head of the real estate division of Allianz Italia -. We’re looking for core and added value products offices in Milan, as well as offices in Rome”.

Milan remains the main target, but also the capital has the potential to offer quality properties. Allianz is also evaluating shopping centres in leading positions in Milan and Rome, “but we look with interest also at alternative asset classes such as student housing. We can consider the possibility to enter the market”, adds Saponara.

The portfolio of the groups currently includes value added relocations of old offices in Via del Corso in Rome and in Corso Italian in Milan. Besides the Allianz Tower in Citylife, there are also prime offices in Via Turati and in Via Santa Sofia in Milan, the shopping centre Fiumara in Genoa, a building in Piazza della Repubblica in Trieste recently converted into a Hilton hotel, a shopping centre and Palazzo Marignoli in Rome.

The main exposures at a European level are in Germany and France. “Our strategy of targeting real estate assets that have the protentional to be requalified is valid also for the rest f Europe – says Alex Gebauer. There is still space in Germany to invest in the main cities, which are more than in the other countries where big cities are generally the capital and a few more”. There is plenty of opportunities to build in Germany, as we can see in Frankfurt. Among the properties of the European portfolio, there are the buildings at number 16 and 18 of Avenue George V and the Allianz Tower in Paris. There is the Dundrum Town Centre in Ireland, owned by a joint venture with the British Hammerson. The Skyline Plaza and the Skyper skyscraper in Frankfurt, this latter bought in 2013 for 300 million euro from Usb Real Estate. There are also significant properties in Hamburg with the Europa Passage (a shopping centre that was opened ten years ago and currently under renovation to implement an entire floor dedicated to food), and Haus Domplatz, plus Vienna, Cologne and Nice.

Returning to Italy, Milan is the only city able to compete internationally. There are other minor cities that have a good growth potential, like Turin. Rome has good chances to attract international investors, as it’s happening right now with the hospitality segment. The outlook for the future is of an additional reduction of returns for properties in Italy.

“Concerning shopping centres – continues Saponara – we’re evaluating bot already existing facilities and new developments, as we believe there is still space for big shopping centres”.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Italy: real estate is worth over 11.3 billion

04 April, Milano Finanza

Real estate is thriving and has left the crisis behind. For Italy, 2017 has been fifth consecutive year of growth in terms of investment volumes, reaching approximately 11.3 billion euro (+18% on a yearly basis) and surpassing the figures registered in the period before the financial crisis (10.8 billion in 2007). And the positive trend is meant to continue also in 2018, according to the latest real estate report by Cushman & Wakefield “Global Investment Atlas 2018”. Investments from Asia have preferred Europe and they’re increased by 96% over the past year. Milan has been the most dynamic market, with 55% of the total investments in Italy. Concerning cities, London has overcome the fears related to Brexit, remaining the most sought-after city by international capitals. Regarding the retail sector, which represents 20% of the total investments, the high street segment has registered a consistent increase in rent prices over the recent years, confirming its great appeal. “There is a high demand, due to the limited offer for properties in prime areas. For this reason, the segment is growing also in Venice and Florence, besides Rome and Milan, Also Turin, Genoa, Padua, Naples, and Bari have started seeing some activities in high street, even though with smaller capitals”, explained Carlo Vanini, Head of Capital Markets for Cushman & Wakefield. However, the best performance in terms of yearly growth of investments has been reported by logistics, which has almost tripled its transaction volumes. With 1.5 billion, the segment represents 13% of the total volumes. “We’re currently studying the impact of e-commerce on the sector”, added Vannini.

At a regional level, investments in Europe and the Middle East have taken two different paths. While Europe has registered a performance record for the third year in a row, the Middle East has touched the lowest point since 2012. The United Kingdom and Germany are the most attractive markets in Europe. According to the report, 2018 will see a further growth for the global volumes and for the Italian market.

Source: Milano Finanza

Translator: Cristina Ambrosi

The Coima challenge: redoing the Milan skyline with international capitals

01 April, Economy

It took 18 months, but instead of raising 500 million euro, they raised 650. The first 150 came in October 2016 from an “important sovereign fund”. Then came other two cornerstones, a second sovereign fund and a “primary international investor”, each with 150 million-euro tranches, and a bunch of institutional investors mainly from Asia and North America. We don’t know the names and how much they put, it’s all protected by a non-disclosure agreement. What is certain is that the closing of the fund Coima Opportunity Fund II (COF II) is the icing on cake for the tenth anniversary of the asset management company of Manfredi Catella, which was celebrated in the environmentally sustainable headquarters in Piazza Gae Aulenti 12, designed by Studio Mario Cucinella Architects (while the interiors were designed by Coima Image of Alida Catella).

COF II is the biggest Italian real estate investment fund ever raised in Italy: 650 million and an investment capacity of one billion and a half. However, Manfredi Catella assures, “dimensions are not the primary objective of our strategy, rather they’re the consequence: the better we work, the more trust we get from investors”. These have appointed Coima for all the critical decisions regarding the capital: “When you’re an asset manager, the confirmation of your good work comes when investors give you the capital and delegate to you all the investment decisions”.

With 21 real estate funds, over 5 billion of assets under management and 150 properties, after having redesigned the Milan skyline developing together with Hines Italia the new neighbourhood of Porta Nuova, Coima Sgr is back. In fact, the fund has already made acquisitions for one-third of its capacity, obtaining the area between Melchiorre Gioia, Pirelli and Sassetti, namely a surface over 32 thousand Sq m paid approximately 79 million. In addition, the fund bought through a joint venture with Coima Res (36%) the former Unilever tower in Via Bonnet, always in Milan. The fund follows the same strategy as COIMA Opportunity Fund I, with expected net returns over 12%, consisting of requalification operations of already existing buildings, the so-called value-added operations. As stressed by Catella, “the cost for the requalification must not exceed 15% of the purchase price”. There are also development operations to fill the gap between demand and supply, especially for what concerns services: “There are operations for over one billion in the pipeline. For this reason, we want investors willing to be also partners, with a higher investment capacity than the one dedicated to the fund. This is an important milestone for us, but also for the country. Italy is at the centre of the attention of international investors right now”.

To the point that 5% of the most important global sovereign funds are Coima partners: of the 2 billion raised in the last three years, 53% came from such investors. It’s not possible to know the countries these capitals come from. The only exception is Abu Dhabi, that appointed Coima Sgr for the construction of Torre Gioia 22, and the Qatar Investment Authority that has acquired from Coima and partners (Unipol, Hines, the retirement fund Ttiaa-Cref) 60% of the interests in Porta Nuova, owning already the 40%. For which amount, it hasn’t been disclosed so far. But it’s rumoured that the sellers earned a good 30% from the operation.

Source: Economy

Translator: Cristina Ambrosi

Investors will continue investing in Europe, Italy included

05 March, Il Sole 24 Ore

Good news for the Italian real estate, at least for what concerns big investments: offices, shopping centres and logistics in the country still attract and will continue to attract expert investors. The changes at a system level, starting from interest rates, don’t scare international investors and Europe on the overall hasn’t lost its appeal.

The quarterly survey Global Commercial Property Monitor by Rics measures the sentiment of investors and occupiers in commercial real estate. The survey confirms the overall optimism of the property markets analysed in the survey for the fourth quarter of 2017. In fact, the Occupier Sentiment Index created by Rics is positive for 28 of the 34 surveyed countries, while the Investment Sentiment Index is positive for 27 of them. 1,600 companies from all over the world took part in the survey.

Europe is still brilliant

Despite the changes in the monetary policy going on in Europe, Berlin, Amsterdam, Frankfurt and Madrid confirm to be the most attractive marketplaces for investors as well as for tenants, according to Rics. However, there is an emerging trend addressing smaller markets of central and eastern Europe, with positive results in Sofia, Budapest and Prague.

The Eurozone is living one of its best moments after the financial crisis. Once again, the markets reported in the last quarter of 2017 the best performance concerning Investment Sentiment and Occupier Sentiment, showing a positive outlook for 2018.

If anything, the only issue is the lack of offer in quality properties, for instance in the office segment, where the rate of vacant spaces is at its lowest point since 2008. This plays a fundamental role in keeping prices high, and it may explain the relatively optimistic outlook, despite the possible change of direction in the monetary politics of the ECB this year.

The Italian race

“The positive outlook already registered in 2017 is also confirmed for 2018 – explains Daniele Levi Formiggini from Rics Italia – Compared to the previous quarter, the Italian market has grown in terms of investment sentiment as well as of occupier sentiment. Milan is still the most attractive marketplace for international investors, and prime retail is the segment with the greatest growth potential”.

Italy has registered a consistent increase in new properties available in the office and retail segments, even though only this last one has a bigger quantity of properties on offer. Compared to the third quarter, the growth potential of rents has grown in all the segments, while it’s negative only for secondary industrial properties. More in detail, in last quarter of 2017 the Investment Sentiment Index has grown by 13% compared to 2016, and the demand for investments continues to concern the retail and office segments, while it’s unchanged for industrial assets. Concerning this segment, however, there is a growing interest from international investors, according to Rics. “The people interviewed forecast that all the prime assets will report significant earnings on the capital value over 2018”, reads the Rics survey.

Milan still at the top

Milan remains the most interesting marketplace in Italy and most of the surveyed believe that the Italian market is still at the initial or intermediate stage of its growth. Moreover, 89% of the interviewed thinks that prices on the Italian market are equal or lower their fair value. What about the future? The forecast for the next 12 months speaks about a positive trend in the prime segments in terms of growth potential as well as of expected value growth for transactions and rents, while both indicators are still for the secondary markets.

The impact of Brexit

Despite the recent reports speak about fewer job losses than initially expected consequently to the decision of UK to leave the EU, the surveyed are still reporting consistently inquiries regarding properties available by British companies. These inquiries mostly concern Amsterdam, followed by Warsaw, Dublin, Paris, and Frankfurt. At the same time, nearly one-quarter of the London-based interviewed declared to be contacted by international companies planning to transfer their business in the UK. London is still an interesting marketplace for investors, despite being perceived as expensive according to the main parameters of the analysis.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

All the cities attracting non-resident buyers

25 February, Mutui Online

The Tecnocasa Research Study has analysed the transactions for the first semester of 2017 in the main Italian cities, in order to identify the highest percentage of buyers that bought a property in a city other than their city of residence.

The most relevant figures come from Florence and Verona, that have registered respectively 12.3% and 11.8% of purchases from people coming from another province, and 12.3% and 14.5% of people within the province.

Milan has performed well too. 82.7% of the transactions concern people already residing in the city, while 10.2% of the buyers come from other cities and 7.1% from towns of the hinterland. It’s followed by Bari, Bologna and Rome that report all very similar percentage, respectively 9.6%, 9.3% and 8.6%.

Whereas Palermo, Genoa and Naples have registered the lowest percentage of non-residing buyers, setting respectively at 3.5%, 4.7% and 5.6% on the total transactions registered on the portal.

People in Milan mostly purchase to invest

The city attracts purchases from non-residents thanks to the excellent returns the properties can offer. Returns are set at 5%, the value is obtained from the ratio between the yearly rent price (considering a one-bedroom apartment) and the capital invested for the purchase.

Milan has registered record sales also for purchases for investment, representing 24.6% of the transactions (+8.7% compared to the same period of 2016), with a higher concentration in the central areas. The Milan property market has seen a boom of transactions especially with regards to new constructions, or properties still under construction, while the demand for low-energy efficient properties located in poorly-serviced areas is rather small. In the first part of last year, transactions registered a +8.3% compared to the same period of 2016, with prices for the Navigli, Fiera-Sempione and Via Quadronno areas reporting the biggest increases.

Purchasing a house with a mortgage

Borrowers can currently benefit from low interest rates. In the last survey by MutuiOnline.it, rates touched at the beginning of the year a new low: 0.92% against 0.93% in December.

How to choose a convenient mortgage

To choose the best mortgage option, it’s possible to consult the portal MutuiOnline.it to make a comparison between the various mortgages offered by the main banks.

Considering an inquiry dated 15 February 2018 from a client from Milan aged 50 buying a second house, a required amount of 110,000 euro to repay within 20 years, a property valued 220 thousand euro, the best solution is offered by Cariparma-Crédit Agricole.

Mutuo Credit Agricole, in fact, offers monthly payments of 687.68 euro with TAN at 1.60% and Taeg at 1.99%. Application fees amount to 500 euro, while the appraisal is free.

Each mortgage has two options. One is called SaltaRata (the possibility to skip one payment once a year without additional costs), the other can be chosen between SospendiRata (the total suspension of the payments up to a period of 12 months), SospendiQuota (suspension of the reimbursement of the only capital share for 4 times for a maximum of 24 months) and RegolaMutuo (increasing or decreasing variation up to a maximum of 5 years of the initial duration only once in the whole mortgage life).

Regarding floating rate loans, the best solution is offered by the online mortgage of Banca Sella, with monthly payments of 644.79 euro (0.72% rate and Taeg at 1.15%). The application and appraisal fees are respectively 275 and 200 euro. The loan is dedicated to private investors not over 75 years of age at the contract term.

Source: Mutui Online

Translator: Cristina Ambrosi

Italy in pole position to ride the wave of innovation

16 February, Cbre

The key word for 2018 will be innovation. Or rather, it will be a particularly topical form of innovation that is digitalization: a phenomenon that already influenced the property market in 2017 and will continue to do so over the next five years.  And Italy, paradoxically, is in an ideal position to ride this trend: the competitive disadvantage accumulated in the past will prove to be an advantage in terms of greater growth margins than in other European countries such as France, Germany and Spain, where at investment level a lot has already been done. This is another reason why we are seeing a growing interest on the part of foreign investors for our market.

Italy is considered a key country in the European arena with great potential for growth: because it has high levels of consumption and available income but a low penetration of e-commerce.

Digitalization will affect three crucial real estate sectors. First and foremost, logistics, a segment growing strongly that will see a consolidation of this trend in the next few years. There is a lot to be done on this front and the challenges are many but Italy is considered a key country in the European arena and one with great potential given that, compared to the European average, it has high levels of consumption and available income but has a low penetration of e-commerce, thus a huge potential for growth!

Secondly, there is the subject of shopping malls, which with the advent of online sales will have to rethink their business models to give consumers a good reason to buy from them on their premises rather than buying when sitting comfortably on their sofa at home with their tablet or smartphone. The difficulties will undoubtedly be greater for “secondary” malls but, in any case, for the whole sector one thing is quite clear: a change of layout is needed to increase entertainment models and distinguish malls from online sales, which today account for less than 10% of sales, but which will certainly increase their weighting in the years to come.

The third and last area “infected” by digitalization will be the office sector, where there will be an increasing drive towards new ways of working, leveraging on smart working and new technologies. In this case too, the road is mapped out and we will see growing activity: international companies are trying to make workplaces more comfortable and to use spaces in a more efficient way.

In this scenario CBRE always strives to be in the forefront. In Italy today we have a team of nearly 1000 people servicing our clients, both owners and tenants, throughout the country for all their needs. We are by far the number one company in the sector and thanks to our international profile and to our 360° range of services we are able to have a privileged and effective dialogue with both local and international players wishing to invest in our country. After all, Italy has always been viewed as an interesting target: for real estate, 2017 was a record year with a total transaction volume that reached 11.4 billion, up 20% on the previous year and, above all, higher than the levels prior to the crisis of 2007. However, compared to a decade ago, the equity used in transactions is much more substantial and has reached 50% versus the 20% of the past. A sign that the system is more robust and this is partly why we are expecting 2018 to be another year in line with 2017.

2017 was a record year for real estate: we returned to the levels seen prior to the 2007 crisis but compared to then the system is more robust because the equity used in transactions has risen from 20% to 50%.

Source: Cbre