Investment
The many challenges facing the market anticipated the slowdown in investment, down 63% on H1 22. Industrial & Logistics and Hospitality continued to lead the way, with foreign capital increasing and accounting for 50% of the half-yearly share, while prime yields rose by 50bp in High Street Retail, but remained stable in all other sectors.
Office
Healthy occupier market in both Milan and Rome recording a take up of 173,000 sqm ( with a further 20.000 sqm of sublease activity) and 152,000 sqm respectively. Availability remains scarce for both CBD’s contributing to high prime rental values. For investments, offices have emerged as a key worry for the global real estate market with investments just below 400 €Mn, declining 80% on figures for H1 22.
Logistics
Strong activity recorded during the second quarter for the Logistics sector, with take up increasing by 39% on Q1 figures, bringing figures for H1 23 just 5% below those recorded in H1 22. Despite the slowdown in investment volumes, the Logistics sector proved to be more resilient than other asset classes accounting for 25% of the overall CRE investments.
Retail
Few active investors in the retail market with investment volumes in the order of 200 €Mn. Shopping centre footfall and turnover continues the positive trend, returning to pre-pandemic levels. Retailers show cautious optimism and look at cities with the highest number of visitors for their expansion plans.
Hospitality
After a strong first half, a slowdown in transaction activity was recorded during H2 as a result of rising debt costs and economic and geopolitical concerns. Nevertheless, several high-profile deals were completed in prime markets such as Rome, leading to an increase in the average price per room. Hotels remain an effective inflation hedge which, coupled with the return of international capital, should support appetite in the sector.
