Get a summary of the investment market in the Southern Regional Markets - Italy, Spain and Portugal - giving an overview of the historic investment trends and volumes, for each country.
With a total of €21.9 billion in investments in 2024, the Southern European regions recorded a 34% increase compared to 2023. Notably, the second half of the year showed a significant rise over the first half, with a 55% increase in volumes, being respectively at €13.3 billion and €8.6 billion.
This positive trend underscores the increasing investor confidence in the Southern European economies and the resilience of their real estate markets, driven by factors such as economic stability, the attractiveness of key sectors like Retail and Hospitality, which have become the leading asset classes in each market, and improved financing conditions. Moreover, growing interest is directed not only towards high-quality assets but also towards buildings with repositioning potential. Significant capital movements are taking place, particularly in the conversion of obsolete office buildings into residential or hotel spaces.
Italy Investment Market
With a total of 6.5 €Bn invested, the second half of 2024 marked a significant growth in the Italian real estate market, doubling the volume recorded in the first half of the year and bringing the annual total to 9.9 €Bn, achieving a 55% year-on-year increase in investment volumes compared to 2023.
This growth was driven by unique transactions, the resurgence of Retail deals, and the strengthening of Logistics and Hospitality sectors, supported by improved financing conditions due to declining interest rates. Italy maintains its competitive edge in Europe, particularly in Logistics, with a focus on prime hubs and last-mile assets. In Hospitality, Rome emerges as a major player, recording growth rates above the European average, thanks in part to the potential impact of Jubilee 2025, as does the leisure sector, which continues to attract both operators and capital.
Alternative asset classes, such as Living (including Student Accommodation and Senior Living) and Data Centers continue to be extremely attractive. However, their relative immaturity continues to limit transaction volumes, though growth is expected in the near future. The Data Center market, in particular, is expanding rapidly, driven by rising technological demand and the saturation of other European hubs Prime central offices and ESG-compliant redevelopment projects remain key opportunities, offering stable and growing returns, due to their scarcity, growing demand and low vacancy rates, despite the challenges posed by energy costs and sustainability requirements.
