Investment
Last quarter investment volumes surged +80% from the previous quarter, nearing 3€Bn, aligned with the same period last year. It marked a positive move since the end of last year, following a return of confidence among investors since last December. CRE investment market in 2023 reached 6.2€Bn (- 46% YY), with Hospitality and Logistics the best performing asset classes.
Office
Occupier markets performed positively in both Milan and Rome (412,000 sqm and 243,000 sqm respectively), above the 10-yr average but below record years. ESG, Location and Talent attraction remain the main drivers of demand. Office investment volumes down 76% on 2022 levels, accounting approx. 1.1€Bn (66% in Milan and 25% in Rome) comprised mainly of core+ stabilized assets.
Logistics
The occupier market maintains the good trend recorded last year, with an absorption almost in line (above 2.7Mn sqm) and a demand focused on quality, environmental efficiency and technology. The most active sectors continue to be 3PLs, Retail and Food. Investors remain confident about fundamentals, but volumes down 41% on 2022, at circa 1.7€Bn.
Retail
Performances of retail occupiers have generally improved YoY, reinforcing the fundamentals of retail investments. Rental levels in the prime high street locations (Via Montenapoleone, Milan and Via Condotti, Rome) have further increased. Investment volumes remained modest at some 700€Mn with activity focused on opportunistic out-of-town deals. The worsening of the financial environment and limited investment activity resulted in an increase of the expected prime returns of some 25-50 bps.
Hospitality
Second half of the year investment volumes bounced back and hit around 1 €Bn, nearly twice as much as the same time in the previous year and higher than the first half. The annual volume of about €1.5 bn was almost aligned to past year figure. The sector remains attractive due to its strong performance and prospects for 2024 are still positive. Yields increased in the second half to match the overall higher yield situation and the tight lending conditions. This pattern is expected to continue for lower-quality assets in the short term, while high-quality assets in the luxury sector are likely to stay steady. Outlook confirmed positive.
