Situational factors such as the rising protectionism and the deceleration of the Chinese economy have contributed to a limited growth for Italian GDP in 2019 (+0.1%). Forecasts for 2020 are positive at +0.4%, but still moderate.
The occupational market remains dynamic and highly attractive, with both Milan and Rome recording a peak in absorption since the beginning of the year. Location and quality of stock remains the key driver for tenant movement. On the office investment side, there is a strong demand perceived focusing on prime assets as well as secondary well-connected locations.
After several months of improvement, employment has stabilised, while unemployment rate has decreased further to 9.5%. The relatively good conditions of the labour market, supported by low levels of inflation, are generating some positive effects on private consumption. Demand for prime high street investment opportunities is expected to remain high. In the out-of-town sector, the gap between prime and secondary products has widened.
The industrial logistics real estate sector is experiencing a healthy growth, both on the occupational and investment side. Ecommerce and last-mile logistics requirements are increasing in line with online retail sales, which require more spaces to manage not only the sales but also product returns. This has created a new market for institutional investors who are now competing for small buildings in urban locations, by purchasing entire portfolios and single opportunities in this asset class.