Italian commercial real estate shows high profitability
Portal Idealista conducted an analysis of the real estate market in Italy. According to the data, the housing sector showed a decline in profitability from 7.8% to 7.4% in the 4th quarter of 2022. At the same time, commercial real estate in Italy showed an increase in profitability. Retail facilities for the year rose from 11.6% to 12%, office space rose to 9.3% from 9.2%.
In the rental housing sector, the most profitable properties are in Belluno. Here the yield is 11%. In second place is Ragusa, where rents bring 10.4% per annum, and the third is Biella with an indicator of 9.9%. The yield on property in Siracusa and Trapani is 9.3% and 9.1% respectively.
Rental housing in another 13 capitals of the Italian provinces shows good profitability. For example, in Campobasso profitability is at 8.6%, and in Terni – 7.5% per annum. The least profitable markets are Cuneo and Salerma, where real estate in the year brings a profit of 4.4%.
If you look at the markets of major cities in the country, Naples takes the lead with an annual rate of 5.9%. In second place is Bologna with 5.7%, followed by Rome with 5.6%. In Milan, the rental yield is 5.1%.
As for commercial real estate, a high yield shows objects in Milan – 16.7%. In Rimini, the figure is slightly lower – 16% per annum, and in Naples – 15.9%. In Rome, the profitability of commercial property is 13.2%, and in Turin – 13.7%. In Venice, the profitability of this type of real estate is at 9.9%. The lowest yield of commercial premises is recorded in Cuneo – 7.5% per annum.
The leader among office real estate in the provinces is Pistoia, the yield of facilities here is 11%. In second place is Frosinon with 10.5%. As for major cities, Rome and Verona are in first place, where offices bring in 9.2% per annum. Next comes Naples with a score of 8.9% and Milan with 6.7%. The lowest profitability is in Bergamo – 6.2%.
The real estate market in Italy regularly attracts foreign investment. In 2022 their volume amounted to 8.9 billion euros, and the most interesting for investments were the markets of Rome and Milan.
Active development of tourism after stagnation due to the pandemic contributes to increased investment in the hotel sector and housing. Properties are purchased for renting to travelers. Last year, the volume of investment in hotels grew by 30% and exceeded 4 billion euros.