Key Themes Shaping the New Market Environment

A Resilient Macroeconomic Environment

The first half of 2026 confirmed the resilience of Italy’s macroeconomic fundamentals. Growth remains moderate but stable, supported by a strong labour market, rising real incomes and resilient consumer spending. Despite ongoing geopolitical uncertainty, the economic backdrop continues to support real estate market activity and investor confidence.

Investment Market: Recovery Gains Momentum

Following the recovery recorded in 2025, the Italian real estate investment market experienced a strong rebound in H1 2026, with €7.75 billion invested (+45% YoY). International capital accounted for approximately 68% of total investment volumes, reaffirming Italy’s attractiveness to global investors.

For the remainder of 2026, the market is expected to see:

• The gradual return of core investors;
• Continued focus on prime, ESG-compliant assets with resilient income profiles;
• Increased selectivity in investment strategies and capital deployment.

Retail: The Most Dynamic Sector

Retail emerged as the leading investment sector during H1 2026, attracting approximately €2.55 billion of capital. Shopping centres, retail parks and prime high street assets continue to draw investor interest, while the luxury segment benefits from the expansion of international brands and the growing integration of retail, hospitality and lifestyle experiences.

Hospitality: Strong Fundamentals

Tourist arrivals reached 88 million in H1 2026 (+4.4%), while RevPAR increased by more than 11% year-on-year. Italy continues to attract international operators and investors, particularly in the luxury segment, with strong interest in hotel conversions, repositioning projects and high-end hospitality assets.

Logistics: Record Demand and a More Mature Market

With more than 1.5 million sq m of take-up recorded in H1 2026 (+59% YoY), the logistics sector delivered its strongest first-half performance on record. The limited availability of Grade A space continues to support rental growth and investment activity, while demand remains concentrated within Northern Italy’s key logistics corridors.

Office: Healthy Demand, Constrained Supply

In Milan, occupier demand remains robust but continues to be constrained by the shortage of Grade A office space, particularly within the CBD, where prime rents have reached €850/sq m/year. In Rome, market performance continues to be supported by limited availability of high-quality stock and ongoing conversions to hospitality, residential and student housing uses.

Living & PBSA: Strong Demand and Structural Undersupply

Demand for residential accommodation continues to grow across Italy’s major cities, supported by demographic trends, increased mobility and declining housing affordability. Within the PBSA sector, Milan and Rome remain significantly undersupplied compared to European benchmarks, despite an expanding development pipeline. Planning constraints and elevated development costs are expected to maintain a structural supply-demand imbalance, further reinforcing the sector’s attractiveness to investors.