Real estate investment in Italy: sector analysis in 2023 by sector

In Italy, investments worth 6 billion euros in capital markets are registered in 2023, a decrease compared to 2022. This is evidenced by the latest report from the Gabetti Study Bureau, which shows that 2.4 billion euros were invested in the fourth quarter of 2023, a +17% increase compared to the same period in 2022. Investors regained confidence in the last quarter of the year, transferring the positive trend to the following quarters, which was a positive shift after the first nine months of the year.

Predictions for 2024 for real estate investment

The forecasts for 2024 for real estate investments depend on the main economic-financial fundamentals that institutional investors will face, their shape will be determined by the movement of interest rates and also by the sustainability of the fundamentals of Italian cities. According to the forecasts for 2024, the situation for corporate investments seems to be more favorable compared to 2023, with the consolidation of assets in the office and logistics segment, as well as the residential sector, which, due to the disequilibrium between supply and demand, will reach an investment volume that is likely to exceed the record of 1.1 billion euros achieved in 2022.

By studying different types of assets, we can see which were the best investment themes:

• Logistics
In the last twelve months, 1.5 billion euros have been invested in logistics, representing 25% of total investment, making it a preferred sector for investors. This sector is mainly concentrated in Northern Italy, where new LEED or BREEAM certified building projects are developing.
• Offices
The office sector with 1.2 billion euros of investment (20% of the total) is mainly concentrated in Milan and Rome.
• Hospitality sector
The hospitality sector, with 1.15 billion euros of investment (19% of the total) stands slightly below the office sector. This volume is the result of a transaction of more than 200 million euros in the center of Rome in the last quarter of the year, while deals are also being registered in Milan and in the Veneto and Tuscany regions.

In recent years, the need to reposition the hospitality sector in light of an increasingly exclusive and demanding demand has become apparent. This trend has marked value-added deals and repositioning in 2023.

Residential sector

In terms of investment volume, the housing sector follows with 830 million euros, accounting for 14% of the total investment volume, where investors are primarily focused on new housing, especially in Milan. This sector has the potential for further growth, considering the product shortage compared to the increasing demand, both in the rental segment and in various forms of collective housing, such as student accommodation and housing for the elderly.

Retail trade

The retail sector contributed 630 million euros, accounting for 11% of the total investment volume. This amount was achieved thanks to significant real estate sales, mainly in the second half of the year. In terms of location, primary cities are seeing active transactions on high streets, while secondary cities are dominated by deals in shopping centers and warehouses.

Healthcare

The healthcare sector (440 million euros, 7% of total investments) benefited from deals related to hospitals, clinics, and nursing homes, which, in terms of the number of transactions, are mainly concentrated in Piedmont.

Mixed sector

The mixed sector (140 million euros) accounted for 2% of the total investment volume, while alternatives, including land, data centers, and stations, also made up 2% of the total volume with 126 million euros.