exporeal.net - INTERNATIONAL MARKETS

Among other large cities, Florence, where the listed company Immobiliare Lombarda is directing the project to regenerate the Castello area, and Rome are seeing a minor boost if you compare today’s demand with that of twelve months ago. Prices in the Capital have on average risen 6.5 percent in 2006. This includes the demand for many investment properties, in particular two- and three-room flats. Project developments (including the Romanina project of the Immobilfin Group) in many areas of the city which, after being upgraded, have witnessed a noteworthy improvement in services. In the cities in the South, impressions of greater prudence should prevail in the coming months. Tecnocasa nevertheless maintains that 2006 prices in Naples, in particular in the beautiful hilly areas, have shown a total annual increase of 7.4 percent. In Bari, the capital of the Puglia region, prices have risen a total of seven percent and a series of measures that in particular involve the city’s waterfront area are in the pipeline.

In the course of 2006 the office sector market seems to have reversed the negative trend from the previous years. “Sales increased by six percent, reaching seven billion Euros. The heavy increase of large investors was helped by an increase in demand by consumers, above all for medium-sized spaces in the main cities”, reports Scenari Immobiliari.

Prices for office and retail are raising again “The country’s improved economic climate will ultimately help the office sector in the course of 2007, which could reach 7.4 billion Euros in sales, an increase of 5.7 percent. As far as prices are concerned, after an increase of 3.2 percent in 2006, they should rise by 3.7 percent in 2007. Rents should perform especially well, in particular in top locations.” The retail sector, which for years has been the best performer, is in a downsizing phase for large distributors, but new generations of shopping centres are emerging. The shopping sector, on the other hand, “has reversed the negative trend and in 2006, for the first time in several years, has had a positive balance between closures and openings”, says Scenari Immobiliari, according to whom the sector’s 2006 sales were 7.3 billion Euros, with an expected increase of 2.7 percent in 2007.

The investment market

In the last annual survey of its own members conducted by INREV on their real estate investment intentions, Italy ranks low (but don’t forget that the survey was conducted last November, when the climate of insecurity in anticipation of the new tax system still prevailed), but the take-off of several large projects with strong presence in the service sector in the cities should create new investment possibilities. In Milan the “Centro Leoni”, a complex of around 52,000 square metres by UBS Real Estate, was recently delivered. The market, even with “very active” local players including the omnipresent Pirelli RE, often together with foreign partners has been strongly stimulated by the international investors present in Italy.


Photo: “Centro Leoni” in Milan—a complex with 52,000 square metres of office space that UBS Real Estate recently inaugurated.

In spite of the negative effects of the “Bersani-Visco Decree” which has exacerbated the tax treatment of acquisitions since last summer, the year 2006 ended with a cross-border bang, and 2007 has got off to a good start as well. Some examples: ING Real Estate acquired three buildings at the “Bodio Center” in Milan owned by the German investor DEGI, which in turn immediately reinvested in the Outlet Center of Franciacorta, near Brescia in Lombardy: a huge double deal totalling 356 million Euros. The American group Tishman Speyer spent 82.2 million Euros in its successful bid to acquire the office building where the headquarters of Telecom Italia is located in the heart of Milan. The Australian firm Babcock & Brown just unveiled “La Torre delle Arti” (The Tower of the Arts), a new 20,000 square metre residential project.

Interest in “secondary” locations is growing and “countercyclical” products are being sought out. DEGI has acquired the Belgioioso Commercial Centre in Carpi in the Emilia region, and the English company Pradera has bought the Tuscia Shopping Centre in Viterbo in the Lazio region; these purchases both totalled over 50 million Euros. The American company ProLogis has invested in Anagni, also in Lazio, in a 30,000 square metre distribution facility. And the Dutch company Foruminvest is building the Mongolfiera Commercial Centre near Bari: a mall with about 25,000 square metres and 130 stores, and has just announced the development of "Le Fragole" (The Strawberries) Shopping Centre in Afragola near Naples with 30.000 square metres.