The growth of investment: why there is interest in office and hotel real estate
The Italian real estate market, despite the global challenges, remains in demand. After a lull during the pandemic, the office sector has recovered its activity and has once again become interesting to buyers. There was a high growth in investment in 3Q 2022. It was possible to attract 95% more capital than during the same period in 2021.
In addition to the office sector, investors showed interest in hotel real estate. And while in these segments there was demand from companies and funds, private investors preferred to purchase luxury properties in popular cities of the country.
Over the past quarter, the office property market has attracted €4 billion, about €1.4 billion of which were funds from foreign investors. A total of 57 deals were completed during the year, with the Milan market accounting for the biggest share. Investment in the city stands at €2.7bn, 67% of the total. A total of 38 deals were completed for office properties in Milan. They involved objects located both in central areas of the city and beyond.
In Rome, investors were also interested in office real estate, but the growth rate in this sector is rather restrained. During the year there were 9 deals worth 800 million euros.
Italy has had a difficult pandemic, and covid restrictions in the country were operating for quite a long time. However, once they were lifted, activity in the hotel sector began to grow rapidly. To help tourism recover after a major downturn, the Italian government has removed the property tax for hotels. Thanks to this step the volume of investment in the sector grew by 14% to more than 10 billion euros. New projects entered the market, among them international operator Six Senses. The company has presented its first hotel in Italy, which is located in Rome. Under construction is now a complex from Marriott International. According to the company, the hotel near Lake Como will be open to the public in 2025.
Investors appreciate the potential of Italy’s hotel sector; they believe that the country’s opportunities are still undiscovered. In addition to the popular Rome and Milan, there are beautiful places for leisure and travel.
As for private investors, they are interested in luxury properties. Leaders among foreign buyers are the British, the Swiss, as well as citizens of France and Germany. Traditionally, the demand is observed primarily in luxury properties in Rome and Milan. In addition, there is growing interest in the property market in Sardinia and Como.