Investment
The Italian investment market slowed down during Q4, despite a 16% increase in volumes Y/Y, reaching 11,60 €Bn. Investors remain active but still deciphering how to factor in the new costs in their underwritings. Some investors are still willing to give a premium for top quality assets compared to the quoted prime yield. ESG remain critical in targeting prime rents and values
Office
The positive trend of the office occupier market has been reconfirmed in the last part of the year, posting a new yearly record level for Milan, with circa 490,000 sq m (above the LTA) and 144,000 sq m in Rome in line with the LTA. Robust occupier market fundamentals drove Q4 Investment at over €820 m a decrease of 54% QQ for a yearly total of circa€4.6bn, almost doubling 2021. Quality and location strongly rewarded by occupiers and investors and the polarization between prime and non-prime assets is expected to increase.
Logistics
The logistics sector confirms a robust and active occupier market, with an annual volume of 2.8 Mln sqm, setting a new record for the market. Investors maintain a keen interest in the asset class and despite a slowdown in activity this quarter, the year ended with a volume in line with last year, standing at almost €2.9 Bn, still a third of the overall CRE investment in 2022.
Retail
Investors are still cold towards the retail sector, on the wave of inflationary headwinds undermining consumers’ resilience and rental sustainability. Fundamentals are anyway improving and confirm the positive attitude of retailers. Q4 registered the highest quarterly value of 2022 with €700mln, while rents were stable in the majority of markets.
