The first signs of improvement of the European economy are being seen in the form of increased commercial property sales in Italy. The country has traditionally been seen as one of Europe’s weaker markets.
The data for the period from January to early October says it all. According to Real Capital Analytics Inc. Foreign investors pumped in a total of 2.75 billion euros or approximately 79% of all real estate transactions of a commercial nature in Italy. This is the biggest foreign investment involving commercial property in Italy since 2007. According to Joseph Kelly of Real Capital Analytics, this is only half the year’s total.
This surge in Italian commercial real estate demand reflects a rise in overall confidence within the euro zone. Investors are now willing to buy into potentially riskier nations like Italy and Spain. It helps that Italy has good quality assets.
It is observed that the biggest investors in 2013 are the ones who had never purchased property in Italy before the global financial crisis. To cite an example, Morgan Stanley snapped up a majority holding in two retail parks and 13 Italian shopping malls for about 635 million euros. The company had made its last purchase in 2007.
Allianz Real Estate’s purchase of two office buildings in Rome and Milan for 90 million euros was its first investment in the country since 2008. According to Mauro Montagner, CEO, Allianz Real Estate Italy, the German Insurance conglomerate is planning more investments to the tune of $500 million.
Europe’s saturated markets
According to Alessandro Mazzanti, CEO, CBRE Group Inc’s Italian division, the year 2013 will end with almost two-thirds of Italian commercial real estate buyers being foreign. This is about double the average of the period between 2009 and 2012. Qatar Holding LLC took a 40% stake in Porto Nuovo in May. It is a two billion euro mixed-use development in the Italian city Milan. This is the biggest transaction until now.
Qatar Holding’s bold move has led to other investors taking a close look at the Italian market. Other foreign investors who have expressed interest include KKR & Co, Cerberus Capital Management LP and Oaktree Capital Management. According to Manfredi Catella, CEO, Hines Italy SGR, Cerberus is close to signing two transactions valued at 400 million euros in total.
Blackstone is heavily invested in shopping malls spread across northern Italy and is engaged in talks to purchase the Milan headquarters of the Italian newspaper Corriere della Sera for 120 million euros. The newspaper is in deep financial debt.
Written by Les Calvert
For more information visit: