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Investor Guide to Europe 2014
Italy has the fifth largest investment market in
Europe by stock, with investment focussed on the
cities of Milan and Rome. as a G8 economy, Italy is
firmly established as major European destination for
global capital, as well as having its own substantial
real estate industry.
The market has been dominated by domestic investors,
representing close to two thirds of activity. Italy also attracts
capital from overseas, including global funds, Middle Eastern,
Uk and US capital. Growing overseas capital has helped
support the recovery in the Italian market.
outside of the core focus on office and retail assets, Italy also
sees demand for industrial and logistics premises around the
major conurbations. International business and resort hotels
are also keenly sought after.
Italy has a relatively small REIT industry, but a strong and
vibrant fund management business, particularly for unlisted
institutional funds. Preferential tax treatment also makes
unlisted funds a viable investment route for international
investors.
The Italian property market has historically shown relatively
stable performance, although latterly the property cycle
shows evidence of becoming longer and deeper. There are
active domestic and foreign lenders, although financing at
present is limited largely to income producing assets.
In recent years availability of debt has been restricted to core
assets at relatively low loan-to-values. over the past year we
have seen improvements to lending conditions. The majority
of debt remains sourced from traditional banks.
Market sizing
Italy
Europe
Invested stock*
(Total stock)
EUR 245bn
(EUR 730bn)
EUR 3,380bn
(EUR 8,150bn)
liquidity ratio*
(10y average)
1.4%
(2.0%)
4.0%
(4.5%)
2013 volumes
(10y average)
EUR 3.5bn
(EUR 5.0bn)
EUR 139bn
(EUR 135bn)
Investment activity by asset type, 2013
Source : DTZ Research
Investment activity by source of capital, 2013
Source : DTZ Research
Market pricing – Milan (Q4 2013)
office
Retail
Industrial
Current Yield 6.50% 5.25% 8.25%
Min/Max
(10y)
5.15-6.15% 5.00-6.00% 6.90-8.25%
Yield
definition
net initial yield
Source : DTZ Research
ITaLY
* 2012 figures
