Investment
The fourth quarter witnessed an increase in investment volumes, reaching 3,4 €Bn, bringing total investment figures for 2024 to just below 10€B, marking a 56% increase compared to 2023. Hospitality emerged as the top-performing asset class this quarter accounting for 21% of total volume invested. Close behind were the Office and Retail sectors, each accounting for 20% of investments. Foreign capital maintained its market share accounting for 72% in Q4, and bringing the overall to 65% for the entire year.
Office
With 671€M invested in the fourth quarter, the office sector has seen increased interest compared to last year's trends, reaching a cumulative volume of 1.9€ B for the year and recording a 74% increase over 2023 volumes. Investment activity remains focused in the cities of Milan and Rome, with Rome surpassing Milan for the first time since 2011. The occupational market continues to show positive performance in both Milan and Rome, with total absorption for the year reaching 370,000 sqm and 166,000 sqm, respectively. Despite the growing demand for high-quality spaces, the market is constrained by a lack of such assets, and absorption volumes do not fully reflect the challenges companies face in finding suitable opportunities.
Logistics
In the fourth quarter of the year, market absorption remained stable compared to the first three quarters, bringing the annual volume to nearly 2.2 million sqm, reflecting a 19% decrease compared to 2023. This decline is primarily attributed to a more cautious approach by 3PLs. On the investment side, with the stabilization of prices, market activity is gradually showing signs of recovery. The logistics sector accounted for 18% of the total annual volume in the CRE market, emerging as one of the most sought-after asset classes, with an annual volume of 1.79€B, marking a 4% increase compared to 2023.
Retail
In the fourth quarter of 2024, the retail sector recorded an investment volume of about 668€M , accounting for 19% of the quarterly total. This brought the annual volume of the sector to 2.49€B, four times what had been invested in retail at the end of 2023, highlighting its recovery. On the leasing front, operators were keen on acquiring quality products at reasonable rents, with a notable interest in high street locations in secondary cities. The solid fundamentals of shopping malls also played a significant role in rekindling investor interest.
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.
