A new quarterly Report of the Research Department of BNP Paribas Real Estate Italy, headed by Cristiana Zanzottera, is online. It illustrates the trend of the Italian Real Estate market. These research reports provide an in-depth view on real estate topics and trends both from the Capital Markets and from the Leasing side: investment volumes, distribution of interest among different asset classes, investors’ typologies, yield trends, demand and supply characteristics of Office spaces in Milan and Rome. The Research Department publications of BNP Paribas Real Estate Italy are based on a deep knowledge of the local real estate market and represent an insight on Italy and the world provided by the global economic research network of the BNP Paribas Group.
Investments in Commercial Real Estate: the slowdown following a record year
In Italy 2018 opened with a level of investment in commercial real estate of 1.5 billion of euro: a decrease of 25% compared with the figure recorded in Q1 2017 (corresponding to 1.9 billion of euro), but 18% higher than the long run average for first quarters (1.2 billion of euro). It should be noted that 2017 was an exceptionally active year, with a peak of investments of around 11.1 billion of euro, a figure which had never previously been achieved in the history of Italian commercial real estate.
In Q1 2018 the traditional hierarchies among different asset classes have not been respected. Unusually, the greatest contributor to total volumes was the Retail sector (50% of the total) and not the Offices sector (20% of the total).
Focus on leasing market in Milan
Take-up in Milan during the first quarter of 2018 reached nearly 88,000 square metres across 60 transactions, producing one of the best starts to a year (+40% compared with the average over the last decade). The year-on-year decline of 12% in Q1 2018 was due to the exceptional _gure of 100,200 square metres in Q1 2017, which included Amazon’s relevant transaction of approximately 18,000 square metres.
Focus on leasing market in Rome
The city of Rome began 2018 with Office take-up of approximately 23,000 square metres from 26 deals, an increase on the average of 15 deals usually completed during the first quarter.
Take-up during the opening three months of 2018 was 12% higher than the five-year average for Q1, in line with the 10- year average and down by around 30% on the corresponding period of 2017 (excluding in all cases IBM’s exceptional 15,600 square-metre deal in the first quarter of 2017).