Market Outlook 2022 REPORT ITALY REAL ESTATE - CBRE
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Market
Outlook
2022
REPORT ITALY
REAL ESTATE
CBRE RESEARCH
Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Editorial
Alessandro Mazzanti. CEO, CBRE Italy Investment volumes in the office market dropped
substantially, but the major upturn in take-up suggests
Investment volumes grew by the end of 2021, a 14% this sector will continue to play a pre-eminent role in
increase on 2020. This figure does not really tell the whole investors decisions in the coming years.
story as to the actual intensity of the recovery because of
The residential sector will play a key role in achieving
the time between deciding to buy or sell an asset and
numbers that match the potential of the Italian economy
completing the transaction. The delays caused by the
and it is a sector that is consolidating and starting to
pandemic impacted 2021, a year which felt the force of the
attract notable interest, but it will take time before it
pandemic more than 2020 as the latter was able to benefit
reaches the far higher levels found in the rest of Europe.
from those transactions initiated in 2019, but only finalised
Indeed, in Europe, residential is the second asset class
in 2020. Taking this critical aspect into account - as is
when measured in terms of investment volumes.
often the case in our sector - then a significant recovery is
clearly underway in all commercial real estate asset Recovery in the retail sector will be slower, but Italy does
classes. offer good opportunities and attractive yields. A few major
Logistics rose to top spot in the asset class rankings by transactions in the high street segment have shown
investment volumes and continued growth in the years investors have not lost interest in well located assets with
ahead looks certain. The sector is experiencing significant solid fundamentals.
product diversification and new investors are entering the Overall, 2021 proved to be a good year for Italy, with
Italian market, particularly international institutional manufacturing and consumption both recovering strongly.
investors. In general, interest is shifting towards new In the medium term, any political changes will not be
locations because of a lack of product in the major decisive for Italy, but were inflation to continue, it could
markets. have a negative impact on commercial real estate.
The hotels sector deserves special attention as Italy could However, we do not feel this will reduce interest in our
play a leading role in this sector internationally, partly market in the year that has just begun, which is likely to
because of recent growth in interest in the Resort see additional growth in this sector.
segment. Italy offers unequalled opportunities with, in
practice, Europe’s largest stock of rooms.
2 CBRE RESEARCH © 2022 CBRE, INC.
Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Contents
Economic Outlook Hotels
01 The Italian economy returned to growth in 2021 and the forecasts for 2022-23 06 The recovery in hotels performances when restrictions were eased is
are for growth above the Eurozone average. Inflation and new pandemic waves reinforcing investor interest in this sector, especially for Italy's cultural cities
represent the main headwinds. and resorts, where strong growth in leisure tourism is expected in the coming
years.
Investment
02 Increasingly efficient measures to counteract the pandemic could further
07 Residential
support the recovery in volumes in 2022, especially with renewed investment The Italian market is increasingly attractive to investors, as renting is growing
activity in the office sector and continued growth in the logistics and multifamily among young people. Limited supply will mean most investments will continue
sectors. to target multifamily developments in Italy’s major cities.
03 Offices 08 Alternatives
A return of the demand for office space will be driven by the search for buildings The search for higher yields and the current emphasis on healthcare and
meeting high ESG standards in established business districts. The take-up digitalization will mean investors’ appetite for healthcare facilities,
recovery is restoring investors’ confidence in this sector. telecommunications infrastructure and data centres will continue to grow.
04 Retail 09 NPLs
Investors will continue to focus on those sectors that are least exposed to the Although transaction volumes dropped compared to 2020, investments in
effects of the pandemic, especially premium high streets, retail parks and secured loans rose again to account for about half of transacted GBV, while the
grocery. secondary market doubled its percentage share over the total investment
volume.
05 Logistics
The expansion of e-commerce will continue to create demand for the renewal
and expansion of the distribution networks run by 3PLs and retailers, causing
rent to rise and even more interest from real estate investors.
3 CBRE RESEARCH © 2022 CBRE, INC.
01 Economic Outlook
Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Italian and European economies growing again during the second half of 2021
Growth beyond the rebound: in 2022 and 2023 the Tab. 1: Real GDP growth projections for Italy and Euro Area This result is without precedent in recent macroeconomic history.
economic growth in Italy should outdo the Eurozone (percentage change over the previous year), % Even once the rebound effect wears off, the forecasts suggest Italy
average will grow in 2023 at a rate three times above the average for the
ITALY EURO AREA
period 2014-2019 (0.85%), at 2.6% (source: OECD) (Fig. 1).
Domestic demand and a rebound in world trade helped make the 2021 2022 2023 2021 2022 2023
The recovery in world trade is evident in Italy's foreign trade
Italian and European recovery faster than expected in 2021. Annual Bank of Italy (1) and performance in 2021, with exports of goods and services increasing
growth rate of real GDP in Italy in 2021 should be about 6.3% (source: Eurosystem/ECB (1*) 6.3 3.8 2.5 5.1 4.2 2,9
by 14.3% in the first nine months of the year (source: Istat).
OECD, Tab. 1). European Commission (2) 6.2 4.3 2.3 5.0 4.3 2.4 Investment also grew substantially (+18.1%; source: Istat). This is
Despite significant uncertainty on both the healthcare and political IMF (3) 5.8 4,2 1.6 5.0 4.3 2.0 above the major European countries and it was driven by
fronts, Italy's economy and that of the Eurozone will continue to OECD (4) 6.3 4.6 2.6 5.2 4.3 2.5 construction sector (+24.5%), which is supported by tax benefits.
expand at high growth rates in the two-year period 2022-2023
Source: (1) Bank of Italy, Economic Bulletin n.1 2022 - (1*) Macroeconomic The most recent figures for 2021 (Q3) show that household spending
(Tab. 1). The Italian GDP growth will largely be based on domestic projections for the Euro Area by experts from ECB, Dec. 2021 - (2) European grew significantly in the period (+4.9%; source: Istat) in many sectors
demand (+6.0% in 2021 and +4.4% in 2022), with net foreign demand Economic Forecast, Nov. 2021. - (3) IMF World Economic Outlook, Oct. 2021. -
that have a crucial impact on the fundamentals of commercial real
making a smaller contribution (+0.3 percentage points for both years; (4) OECD Economic Outlook, Dec. 2021.
estate in Italy, particularly in the services and semi-durable goods
source: Istat - Italian National Institute of Statistics). In 2021, global
Fig. 1: Real GDP growth for Italy, Germany, Euro Area and (clothing, footwear, books) sectors.
trade in goods enjoyed a particularly dynamic first quarter (+3.3% Q-
o-Q), slowed down in the second quarter (+0.8%) and finally dropped World (percentage change over the previous year), % Business and consumer confidence grew constantly through 2021,
between August and September (-1.1%), mainly due to the fall in trade with the values for both finishing above the levels recorded for 2017-
Forecast
with China (source: Istat). 6 2019 at the end of the year. The Bank of Italy's quarterly survey also
4
2 showed that the view of investment conditions for Italy reached, at
As a result of the stimulus coming from the European Next
0 the end of 2021, the highest level for a number of years. Despite a few
Generation EU (NGEU) fund and the continuation of the current -2
-4
signs of demand weakening in Q4 2021 (source: Bank of Italy), these
expansionary monetary policy, many States in the Eurozone will
-6 figures suggest both consumers and businesses are gradually
reach pre-pandemic production volumes in late 2021 or in the first -8 starting to become more confident in the Italian economy.
half of 2022 (source: ECB and Bank of Italy). This result is conditional -10
on the health emergency not leading to further restrictions being 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
placed on economic and social activities. Owing to the rebound in the Germany Italy Euro Area World
economic activity and the expansionary fiscal policy stimulus, Italy's
Source: OECD 'Economic Outlook ‘- December 2021
economic growth in 2021 will be ahead of the World average as well
as that of the Eurozone (source: OECD; Fig. 1).
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Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Some major risks weigh on the recovery forecasts for 2022-23
Inflation and global supply chain disruptions are Fig. 2: Euro Area inflation and its main components Nonetheless, the recovery in the Italian labour market does not
serious headwinds for growth (percentage change over the previous year), % appear to be over. 2021 saw an increase in annual work units
Forecast
6 (AWUs) in the economy (+3.0% and +1.5% the change in the period
After a period of low inflation and low energy prices, the global
in Q1 and Q2, respectively) and in the hours worked (+3.3% and
economic recovery in 2021 came following a higher-than-expected 4
+1.4%) (source: Istat). The total number of people employed
inflation rise. The trend was first evident in the United States, but it
2 increased in 2021 but was still 1.6 per cent lower than in December
eventually encompassed nearly all the Eurozone nations. A debate
0
2019 (source: Istat). The unemployment rate is forecast to drop
is raging as to whether a new era of reflation is on the cards, with a
slowly as production grows, only reaching 9.2% in 2023 (source: CE).
return to inflation and the subsequent increase in interest rates as -2 In the short-term, this overall picture makes it unlikely there will be
the economic recovery moves forward.
a change in market conditions able to fuel a significant wage push.
The return of inflation in Europe in 2021 was fuelled by a rapid
Indeed, inflation forecast for the Eurozone at the end of 2021 (2.41%;
recovery of aggregate demand and problems with supply due to the
Energy and food 'Core' Total source: OECD) will remain above Italian inflation (1.77%; source:
significant ups and downs in demand caused by lockdowns. The Source: CBRE Research on Eurostat data OECD). The ECB, the European Commission and CBRE House View
price of oil, natural gas, electricity and agriculture raw materials also
are all forecasting a drop in inflation in the second half of 2022,
contributed to driving inflation upwards in the second half of 2021
followed by stabilisation in 2023. At the same time, these forecasts
(Fig. 2). Nonetheless, the oil price looks like it peaked in late 2021, Fig. 3: Inflation (on harmonised index of consumer prices) and
see inflation in Italy as remaining below the European average (Fig.
while the other components of the price of energy should stabilise crude oil price percentage change (RHS), % 3), despite the high growth rate expected for Italy.
in mid-2022 (Fig. 2). Such a forecast makes it seem less likely an Forecast
4 100 Importantly, the impact of the pandemic on logistics and supply
abrupt change in the stance of monetary policy is about to happen
3 chains has led to the unavailability or shortages of many durable
and it also goes against the mostly pessimistic views in which 50
inflation could slow down economic recovery in the near future 2 and capital goods, and has created congestion in ports and
(stagflation). Remaining on the supply side of the economy, there is 1 problems for sending goods via sea, with the consequent impact on
0
a risk from a wage push both in response to the increase in prices 0 prices. The bottlenecks in supply could continue and the
and due to the mismatch between supply and demand in the labour -1 -50 uncertainty about how long it will take to resolve these issues are
market in certain sectors that are suffering from a lack of 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 one of the major risks for growth and inflation in the current
employable people with specific professional profiles. macroeconomic scenario.
Germany Italy Euro Area Crude oil prices
Source: OECD 'Economic Outlook’- December 2021 and DG-ECFIN 'European
Economic Forecast’ - Autumn 2021
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Intelligent Investment Real Estate Market Outlook 2022 | ITALY
The temporary nature of the increase in inflation makes drastic changes in monetary policy unlikely
Credit conditions remained favourable in 2021. Risks Fig. 4: Bank lending to private sector (percentage change The Bank of Italy (Financial Stability Report no. 2, 2021) sees the
of financial instability seem minimal over 12 months), % current risks for financial stability in Italy as moderate. The growth
12 in profitability, the abundant liquidity accumulated during the
The temporary nature of the increase in inflation has warded off the
pandemic and the favourable conditions for access to credit are
likelihood of the ECB slowing, to any significant degree, its asset
7 helping corporate balance sheets, while households are enjoying
purchases. Such a possibility is greatly feared by the markets
increased savings and financial wealth because of the economic
because of the negative impact it would have on liquidity, interest
2 upturn and government support. The gradual recovery of the Italian
rates, credit, public finance and economic growth. Nonetheless, the
real estate market is also reducing the risks for financial stability
Federal Reserve Bank and the Bank of England have already taken
-3 due to this sector. The situation is not the same in other European
the first steps in normalising their monetary policies. In Italy,
countries, where real estate prices are growing markedly and there
financing conditions remain favourable in the economy, partly
are signs they are overvalued.
because bank lending rates for firms and households remain at
historically low levels (source: Bank of Italy). In 2021, the rates for Non-financial corporations Households BTP-Bund spread increased slightly at the end of
Source: Bank of Italy
loans to households for house purchase increased slightly. The rates 2021, but instability risk remains low in the short and
for new loans to firms remained stable and at levels slightly below the medium term
average for the Eurozone. The growth rate for bank lending to firms Fig. 5: BTP-Bund Spread, % points The gap between Italian and German government bonds yields
increased in the initial stages of the Covid-19 crisis, but it normalised
2.6 (BTP-Bund spread) grew in the final months of 2021 due to worries
in 2021 and moved close to the average value for the period 2016-
about inflation, increased uncertainty about monetary policy and
2019 (Fig. 4). In 2021, the financial debt of households (property
2.2 reduced bond purchasing by some central banks (Fig. 5). The
loans, consumer credit and so on) was at the same level as in 2012
limited nature of these increases show the cover provided by the
and higher than in 2008. The financial debt of firms was slightly lower 1.8
ECB is working and, thanks to the authoritative nature of the
than in both those years.
1.4 Government and the sound management of the health crisis, the
In 2021, the flow of new NPLs compared to total loans dropped as did "country risk" was only limited in the markets, even during the crisis.
the percentage of NPLs to total loans granted by the main banking 1.0 This led to an improvement in the ratings for Italian government
groups. The feared problems with private-sector financial stability securities from some of ratings agencies and so there seem to be
due to the pandemic have not arisen as yet, thanks partly to large- no risks of any major increases in the spread in 2022, so long as
scale government support. there is no political instability during the year.
Source: Bank of Italy and ECB
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Intelligent Investment Real Estate Market Outlook 2022 | ITALY
2022 marks the start of reducing public debt and deficit from the peaks of Covid-19 crisis
Government plans to target a debt/GDP ratio back to Tab. 2: Outturns and official targets of the main public The current Government is planning to use the available European
pre-crisis levels by 2030 finance indicators (1) (percentage of GDP), % funds in the NGEU scheme to increase public investment in the
three-year period 2022-2024. The Government's 2021 Economic
GDP growth and the more positive than expected trend for 2020 2021 2022 2023 2024 and Financial Document (DEF) includes an increase to €62.9 billion
government revenue and spending in 2021 meant the public deficit Net borrowing 9.6 9.4 5.6 3.9 3.3 by 2024 (3.2% of GDP in 2024). This would be above the long-term
dropped to 9.4% of GDP. This does mark the beginning of the process
Primary surplus -6.1 -6.0 -2.7 -1.2 -0.8 average for the pre-crisis years and also above that of the main
to reduce the debt/GDP ratio, which according to forecasts for the end
Interest payments 3.5 3.4 2.9 2.7 2.5 Eurozone countries. For example, investment by the Italian
of 2021 should already be 2 percentage points below the 2020 level,
Government should increase by 0.9 points of GDP between 2019
reaching 153.5% (source: Bank of Italy). On the basis of a robust Structural net borrowing 4.7 7.6 5.4 4.4 3.8
and 2024, while in the same period the German increase should be a
economic growth forecast for the three-year period 2022-2024, the
Debt (2) 155.6 153.5 149.4 147.6 146.1 third of a point and the French increase, a fifth of a point. In the
public deficit and debt levels are projected to decrease slightly (and, in
coming years, Italy's challenge will be to use the tools included in
2024, respectively should be 3.3% and 146.1% in relation to GDP) (Tab. Source: Update to the 2021 Economic and Financial Document. (1) Outturn for 2020 and
official objectives for 2021-24. Rounding of decimal points may cause discrepancies in totals. – the Simplification decree (and other reforms) so as to spend the
2). The drop in the debt/GDP ratio is due to forecast GDP growth (2) Gross of financial support to EMU countries available resources efficiently.
exceeding the average cost of debt and so offsetting the primary
deficit. The Government's plan is to use this additional income for
expansionary measures, while sticking to the pathway to reduce debt
€62.9 bn
Fig. 6: Public investment (percentage of GDP), %
as this cuts the tension surrounding the interest rates on government 4.0
bonds and the BTP-Bund spread as part of a specific programme to
have the debt/GDP ratio to a specific level by 2030. 3.6
Available DEF resources for public
Increased public investment over 2022-2024 will 3.2 investments by 2024
support aggregate demand and productivity gains
2.8
Between 2009 and 2018, public investment (gross fixed) dropped
regularly from 3.7% of GDP in 2009 to 2.1% in 2018 (Fig. 6). This 2.4
The Government is planning to use
component of public spending - an essential part in sustaining
aggregate demand and productivity through "good" debt - has 2.0
European funds in the NGEU scheme to
increased for the three-year period from 2019-2021. increase public investment in the three-year
Source: European Commission, AMECO data period 2022-2024.
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Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Key Takeaways
01 ITALIAN ECONOMIC GROWTH WILL REMAIN ROBUST OVER THE NEXT TWO YEARS
The excellent growth in Italian GDP in 2021, backed by expansive monetary and fiscal policies, will create a
solid basis for economic growth above the historical average for the next two years as well.
02 INFLATIONARY PRESSURES COULD INFLUENCE THE MACROECONOMIC SCENARIO
Supply chain problems and the increases in energy prices, that were a key part of 2021, should ease in the
second half of 2022. Although there is a definite recovery in the labour market, this looks unlikely to cause
significant wage increases for now. This will help to reduce the risk of inflation stabilising at a higher level.
03 FINANCING CONDITIONS TO THE ECONOMY REMAINED FAVOURABLE IN 2021. FINANCIAL
INSTABILITY RISK IS STILL MODERATE
Lending rates remain at historical lows helping loans to households and firms. Public measures to
sustain liquidity and facilitate access to credit have ensured the private sector financial system remains
stable.
04 GROWTH ABOVE EXPECTATIONS AND INCREASED POLITICAL STABILITY BOOSTED CONFIDENCE
IN THE MARKETS
The ECB's continued government bond purchasing programme and the credibility of the Government
are helping to moderate the increase in the BTP-Bund spread and to raise the rating for government
securities.
05 OUTLOOK OF PUBLIC FINANCES IMPROVED
The government reduced the deficit and debt in relation to GDP in 2021. The sustainability of the public
accounts will depend on the capacity to use European funds as these can help to significantly increase
public investment over the next three-year period.
9 CBRE RESEARCH © 2022 CBRE, INC.
02 Investment
Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Commercial real estate investment recovery underway in Italy in 2021
Record for logistics. Contribution from emerging sectors grows Fig. 7: Investment volume by asset class, €M
Investment volume in commercial real estate in Italy in 2021 was €10.4 billion, 14%
higher than 2020 (Fig. 7). The lifting of most Covid-19 restrictions in the second half of 14,000
the year encouraged a recovery of investment activity, although some transactions
were delayed, and their closing slipped into 2022. The growth of the Italian economy 12,000
and improved political stability helped boost investor confidence in the country.
Investors tended to favour sectors supported by long-term trends or with anti-cyclical 10,000
characteristics, such as logistics, residential and alternatives. For the first time, logistics
went well past €2 billion, reaching a record volume of €2.7 billion (+89% compared to 8,000
2020), thus making it the leading asset class in terms of investment volume. Residential
also marked up a new record, growing 24% for a total of €720 million, 79% of this related 6,000
to the multifamily segment, although still suffering from a major shortage of institutional
product and so is driving investors towards development projects. The intense demand 4,000
for technological assets and healthcare facilities supported investment growth in the
alternative sector, where volumes were more than double the previous year (€1.2 2,000
billion).
0
In the asset classes that were the most exposed to the immediate effects of the 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
pandemic, namely office and retail, the shortage of product left both core investors'
demand for prime and stabilised assets and opportunistic investors' demand for Office Retail Hotels Logistics Residential Alternatives Mixed-use
distressed properties partly unexpressed. The office market experienced a 43% drop in Fonte: CBRE Research
investment compared to 2020, falling to €2.2 billion. Retail closed the year slightly down,
at €1.4 billion (-5% on 2020), of which 68% related to the high street segment, which
€10.4 bn
proved to still be resilient, especially in prime locations. The out-of-town transactions The Italian commercial real estate market is
were limited during the year and tended to involve small assets in secondary locations.
expanding, supported by greater interest in
Finally, the strong recovery in the hotels sector was confirmed, becoming the third
asset class by investment volume, achieving a record level (except for 2019) at the alternative and multifamily sectors, and Investment volume in 2021, +14% on
€2.1 billion (+99% on 2020). 2020
record volumes in logistics.
11 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Investors between caution and seeking yield
2.9% 4.5%
Defensive strategies continue to put downward Fig. 8: Prime yield trend, %
pressure on prime yields
9
The climate of uncertainty caused by the pandemic made
competition more intense among investors to acquire assets with 8 Prime Yield for offices Prime Yield for hotels
positive underlying fundamentals in the medium-long term and able -40 bps compared to -50 bps compared to
7
to ensure regular cash flows despite the healthcare crisis and the pre-Covid-19 values the height of the
consequent restrictions. This trend resulted in a polarisation of 6 (Q4 2019) pandemic (Q4 2020-Q2
investor interest both in terms of location and function, causing an 2021)
increase in the yield spread between primary and secondary 5
markets and between the best performing asset classes and those 4
most exposed to the immediate effects of the pandemic (Fig. 8).
3.95% 6.15%
The compression of prime yields was sustained by the significant 3
availability of liquidity due to the ECB's expansive monetary policy. 2
This trend was found across all the main European markets,
compared to which Italy's real estate yields remained competitive 1
Prime Yield for logistics Prime Yield for shopping
and so able to attract foreign capital. In 2021, foreign investment -125 bps compared to centres
0
accounted for 75% of total investment volumes in Italy, matching
pre-Covid-19 values +75 bps compared to
Q1 2010
Q4 2010
Q1 2013
Q4 2013
Q1 2016
Q4 2016
Q1 2019
Q4 2019
Q2 2021
Q2 2012
Q2 2015
Q2 2018
Q3 2020
Q3 2011
Q3 2014
Q3 2017
the historical average for recent years and up +44% compared to
2020.
(Q4 2019) pre-Covid-19 values
(Q4 2019)
Despite the pandemic continually raising its head throughout 2021,
the success of the vaccine campaign and the recovery of occupier High Street Shopping centres
demand during the second half of the year gave investors new Office Logistics
confidence, encouraging them to look for yields and resulting in
Despite the compression, yields in the most
Hotels Multifamily
them undertaking value-add activities. In the office sector, for BTP 10 years sought-after asset classes remained
example, investments for such initiatives moved from €118 million in
the first half of the year to €580 million in the second half of 2021. competitive compared to other major
Source: CBRE Research
European markets.
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In 2022 investment intensity will increase and major emphasis will be placed on ESG
Increased investor confidence: interest in secondary Fig. 9: CBRE Italy Investor Intentions Survey: How do you The recovery in take-up in the office market in 2021 seems to have
locations and value-add initiatives is growing expect your purchasing activity will be, compared to the reassured investors about value-add initiatives, which were seen as
previous year? the strategy to focus on in this sector for 32% of the investors
The growth in volumes that began in the final part of 2021 marked a interviewed.
80%
positive trend that is confirmed by the strong investment pipeline
found for all asset classes, suggesting further recovery during 2022. 60% 62% 65% For the retail market, it looks like the wait-and-see attitude will
56%
As such, it looks like 2022 will be a positive year for commercial real 47% 45% continue in the sub-sectors most exposed to the consequences of
40% 38% 36% any new waves of the pandemic, which would confirm the gap in
estate in Italy. Despite lingering uncertainty due to a fear of new
20% 22% 23% price expectations between sellers and potential buyers. The
waves of the pandemic, the expectations for the surrounding
9% 6% growing interest shown by investors in the grocery sector and retail
economic conditions remain largely optimistic. The results from the 0% 2% 4% 2%
CBRE Italy Investor Intentions Survey 2022* show investors are 2016 2017 2018 2019 2020 2021 2022 parks will remain strong, thanks to the resilience shown by these
expecting more acquisitions than in 2021 (Fig. 9) tied to an Greater Lower segments during the pandemic.
increased risk appetite. The Survey also found a renewed appetite Source: CBRE Italy Investor Intentions Survey 2022. Option «stable» is excluded The expectations for a recovery in leisure tourism will sustain interest
from the chart. in the Hotel sector, especially in Italy's cultural cities and the resort
for secondary locations, with 36% of the people interviewed
indicating their interest in these had increased. segment. Among the investors that responded to the CBRE Italy
The increase in purchasing activity foreseen for 2022 could be Fig. 10: CBRE Italy Investor Intentions Survey: Which of the Investor Intentions Survey 2022, one in four sees this asset class as
aided by capital raised during 2021, but only partially used during one of the most interesting for 2022.
following statements most closely describes your approach
that year. The figures from Assogestioni indicate that net inflows to sustainability in asset selection? Regardless of the asset classes, one of the key themes for 2022 will
into Italian real estate funds in the twelve months preceding Q3 We will not even consider buildings 18%
undoubtedly be the growing attention to ESG. 77% of the investors
2021 were 33% above the same period in 2020. Moreover, the that do not meet strict criteria 12% interviewed during the survey confirmed that sustainability is one
persistence of yields slightly above those recorded in the other It is one of the most important criteria 37% of the main aspects in any decision about purchasing an asset,
in determining the properties we buy 31%
major European markets could further help to attract new foreign compared to 69% in 2021 (Fig. 10). Furthermore, 84% of the people
Sustainability considerations tip the balance 22%
capital. between options if other factors are equal 26% interviewed stated they had already drafted their ESG strategy for
The CBRE Italy Investor Intentions Survey 2022 showed that the Other considerations are more important, 19%
the coming years.
but sustainability definitely matters to us 23%
sectors of greatest interest for 2022 will continue to be logistics,
especially the last mile, and multifamily. The former will continue to Sustainability is not a significant
consideration in selection assets to buy
4%
8% 2022 2021 18% of investors will not even consider
benefit from the ever growing spread of
e-commerce, while the latter will be aided by the growth in demand Source: CBRE Italy Investor Intentions Survey 2022 purchasing assets that do not meet strict
for rental accommodations seen in Italy over the last decade. *the results of the CBRE Italy Investor Intentions Survey 2022 are available here:
www.cbre.it
ESG criteria.
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Key Takeaways
01 FAVOURABLE CONDITIONS FOR INVESTMENTS WILL CONTINUE IN 2022
Progress in the vaccination campaign and expansive monetary policies will continue to positively
impact the commercial real estate market in Italy.
02 ITALIAN YIELDS WILL REMAIN COMPETITIVE
Despite the significant compression in yields in the most sought-after asset classes, the spread
between the yields in other major European markets will continue to draw capital to Italy.
03 INTEREST IN VALUE-ADD INITIATIVES GROWS
Lifting the Covid-19 restrictions and the recovery in demand from occupiers will encourage the use of
capital in activities with higher risk profiles.
04 ITALIAN MARKET WILL CONTINUE TO GROW WITH THE CONTRIBUTION OF EMERGING ASSET CLASSES
Growth in the multifamily and alternative sectors and the consolidation of logistics will support the growing
involvement of foreign institutional investors in the Italian commercial real estate market.
05 ESG WILL BE INCREASINGLY IMPORTANT
Achieving high levels of environmental sustainability is already seen as a fundamental requirement for
most investors.
14 CBRE RESEARCH © 2022 CBRE, INC.03 Offices
Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Outlook for office space demand is positive thanks to the recovery of take-up volumes
Clear recovery for take-up in 2021 Fig. 11: Milan office take-up trend (,000 sq m) Search for quality contains oversupply risk
The recovery of take-up in 2021 resulted in a progressive reduction 500
In the Milan and Rome markets the development pipeline remains
in uncertainty about the future levels of demand from occupiers for strong. In Rome, the forecast completions for 2022 are in line with
office space. In Milan, absorption returned to the average levels of 400 the volumes recorded for 2018 and 2019, at about 117,000 square
the last 5 years at 357,000 sq m (+29% on 2020) (Fig. 11). The 300 metres; in Milan, the pipeline should see delivery of a significant
market in Rome also showed signs of recovery, reaching 137,000 sq number of square metres (382,000). The risk of rapid growth in
m (+11% on 2020), although in this case the recovery of pre-Covid- 200 vacancy in Milan due to new product reaching the market remains
19 take-up volumes was only partial (Fig. 12). Along with the 100 moderate. Thus far, demand for quality spaces has meant newly
recovery in take-up, a levelling off was evident in the vacancy rates constructed offices have been rapidly absorbed. In 2021, the
0
for both cities, with Milan at 10.3% and Rome at 9.1%. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 percentage of total take-up of recently completed or still under-
During this recovery period no new trends emerged in terms of the construction offices stood at 81%. Most of the pipeline seems well
Q1 Q2 Q3 Q4 5 years average
location choices of occupiers. Demand continues to be positioned, predominantly in the sub-markets that accounted for
Source: CBRE Research 43% of 2021 take-up volumes. Moreover, 38% of the floor area due
concentrated in the sub-markets that drove absorption volumes
prior to the pandemic. This confirms tenants’ interest in established to be delivered in 2022 has already been absorbed.
business districts and excellent accessibility. Fig. 12: Rome office take-up trend (,000 sq m) The demand for new, quality product meeting demanding ESG
Although slowdowns in time-to-market might still be seen, the take- standards will continue to grow in the coming years, increasing the
up results for 2021 suggested renewed growth for office demand in 500 gap between rent for grade A and grade B buildings. Indeed, at the
2022. Such an outlook is confirmed by the expectations for 400 end of the year prime rents had already recorded an increase
recovery of the economic activity and the impact of the National compared to pre-pandemic values, reaching €620/sq m/year in
300
Recovery and Resilience Plan (NRRP), which should support the Milan and €475/sq m/year in Rome.
creation of new jobs. The forecasts are especially positive in the 200 2022 should see a progressive reduction in incentives and the first
Business and the Manufacturing & Energy sectors, which 100 increases in headline rents even in other primary markets. By
accounted for 56% of absorption volumes in Milan and 31% of such 0 contrast, second hand product is likely to see a more marked
volumes in Rome in 2021. By 2027, more than 29,000 new jobs are 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 incentive system supporting demand, especially in secondary
expected to be created in these sectors in Rome and 26,500 in markets.
Q1 Q2 Q3 Q4 5 years average
Milan (Source: Oxford Economics).
Source: CBRE Research
16 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Sustainability as an answer to occupiers’ demand for quality spaces
Pandemic has changed the demand for offices
Fig. 13: LEED and BREEAM certified office take-up in Milan and share of total take-up
The pandemic has emphasised various trends in the demand for office space that have
been present for some time. First, there was an increased awareness of the shocks that ,000 sq m %
critical global events can cause, leading to more emphasis being placed on 600 100
environmental and social sustainability. In response, companies have begun to adopt or 90
reinforce their ESG strategies and so become more selective in choosing their buildings, 80
basing their choice on energy efficiency and sustainability criteria. 450
70
Secondly, the need to reduce the spread of the virus has accelerated the use of remote
working. The spread of "hybrid" work models has redefined occupier expectations about 60
space efficiency and functionality in order to increase employee engagement. 300 50
In such a context, the sustainability of buildings is not only about limiting the 40
environmental impact, but also about focusing on employee health and well-being,
especially through the increasing adoption of policies, procedures and technologies 30
150
that improve the monitoring and reporting of underlying ESG performance and the 20
comfort of interior environments.
10
This trend is reflected by the growth in energy and environmental certification in Italy
0 0
(particularly LEED, BREEAM, WELL). The percentage of certified buildings out of total
2015 2016 2017 2018 2019 2020 2021
take-up in Milan grew from 11% in 2016 to about 41% by the end of 2021 (Fig. 13), thus
achieving a growth rate above the average for the leading European cities (Source: Certified and pre-certified Non certified Share of certified (right axis)
EMEA Sustainability Report, November 2021).
Source: CBRE Research
In terms of supply, all new office buildings in Milan are already certified, while 60% of
stock being upgraded and refurbished will have ESG certification. Nonetheless, the
growing importance of sustainability is encouraging increased use of certification even
for upgrades of existing stock. The constant monitoring of ESG performances of
existing buildings is a trend that will continue to characterise the office sector in 2022
The focus on the ESG performances of
office buildings will be a key element in 41%
and beyond. meeting new tenant expectations. of take-up in Milan in 2021
was for office space in
certified green buildings
17 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Investments in the office sector dropped again in 2021, but the recovery in take-up renewed investors confidence for 2022
Impact of the pandemic continued to weigh down the Fig. 14: Office investment volume by location, €M Demand for core assets continued to be very intense in 2021.
recovery Investors looking for defensive strategies persisted in focusing on
5,000 purchasing stabilised assets, with excellent covenants and in
In 2021, investment volume in the office sector was €2.2 billion, primary locations. The lack of such product generated fierce
meaning a 43% reduction on 2020 (Fig. 14). This was largely due to 4,000 competition among investors, creating new pressure on prime
a few key factors that hit investment volumes in the two primary yields (Fig. 15).
3,000
markets, namely Milan (which recorded a drop in 2021 of 32%
compared to 2020, despite accounting for 78% of the total volume 2,000 The outlook for 2022 is positive. Delays in transactions initially
of investment in offices) and Rome (-53% on 2020). More planned for 2021 should mean the recovery in volumes is going to
1,000
specifically: the wait-and-see approach caused by uncertainty as to be evident starting from the first quarter of the year. The planned
0 investment pipeline for 2022 suggests growth in the volumes of
the future demand for offices; significant problems in obtaining
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
financing for value-add products, leading to a clear reduction in the core transactions, especially in Rome, while Milan will benefit from
Milan Rome Italy other
number of transactions with such a risk profile; the increase in time- new value-add initiatives starting in the best established and most
Source: CBRE Research
to-sale due to the restrictions; finally, the limited availability of core accessible office markets.
product.
€2.2 bn
By the end of 2021, doubts on the future demand for offices seemed Fig. 15: Prime yield trend, %
to have diminished, particularly due to the recovery in take-up 8
volumes recorded during the year. Increased investor confidence
was also reflected in the recovery of value-add acquisitions in the 6 Investment volume in the office
second half of the year, a trend that was confirmed by the CBRE
4
sector in 2021, -43% compared
Italy Investor Intentions Survey 2022. According to this, 32% of
investors saw 'value-add' as the best investment strategy for the
to 2020
office market in the coming year. Yet, investors remain selective 2
when it comes to value-add projects, favouring established
0 Investors continue to be selective in their
business districts and optimal accessibility, although the growing
risk appetite predicted for 2022 could bolster interest in secondary
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
choices. The recovery in the value-add
locations as well. Rome Milan BTP 10 years
Source: CBRE Research
segment will support increased volumes in
2022.
18 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Key Takeaways
01 TAKE-UP REGAINS MOMENTUM
Good office take-up seems to be offsetting the uncertainty about the future of offices driven by the
lingering Covid-19 crisis. The effects on employment of Italy's national recovery plan (NRRP) will
support the dynamics of the letting office market.
02 FUNDAMENTALS WILL REMAIN STABLE, DRIVEN BY THE SEARCH FOR QUALITY SPACES
The continuation of the incentives offered by the landlords on second-hand stock will mean vacancy
rates will remain stable.
03 SUSTAINABILITY AND FLEXIBILITY WILL DRIVE DEMAND FOR SPACE
Many occupiers continue to be interested in solutions offering ESG-certified flexible office spaces that
can be adapted to the changing needs of employees.
04 INCREASE IN TAKE-UP HAS MADE INVESTORS MORE OPTIMISTIC
Recovery in take-up volumes and the better outlook for demand from future occupiers have increased
investor confidence in this sector.
05 INCREASING INTEREST IN VALUE-ADD PROJECTS
The search for yields and the improved expectations for office space absorption have brought value-
add initiatives back into the limelight, although investors remain very selective with such projects,
placing significant emphasis on location quality and accessibility.
19 CBRE RESEARCH © 2022 CBRE, INC.04 Retail
Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Retail investment still shrinking in 2021, but high street is proving resilient
Limited product and wait-and-see approaches dampen
opportunistic investors expectations Fig. 16: Retail investment volume by sub-asset class, €M
In 2021, the retail asset class was down again (-5% on 2020) at slightly under €1.4 3,000
billion in investment (Fig. 16). This result was a combination of persisting pandemic-
driven anxiety and more deep-rooted fears as to the future of physical retail during an 2,500
age of global e-commerce expansion. In Italy, the drop in retail investment was partly
caused by international institutional investors allocating less capital to this asset 2,000
class.
The hardest hit segment is out-of-town retail, which saw few transactions in 2021 that 1,500
were limited to small assets in secondary markets based on disposals that began prior
to the pandemic. The investors that have remained in this sector are looking for high 1,000
yield purchases to justify future exits in a climate of rising yields and limited asset
liquidity. What such investors are looking for clashes with owners' expectations for 500
price, as the latter are hesitant to sell before post-Covid-19 performances picks up.
Opportunistic investors on the hunt for distressed sales are also having to deal with a 0
lack of product because, despite the pandemic, the number of critical situations has 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
remained limited.
In 2021, 68% of retail investments were in the high street segment, which has once Shopping centres High Street Cash & Carry Supermarkets
again proven itself to be resilient, particularly in prime locations. In such places, Retail Park Retail Warehouse Factory Outlet Other Retail
interest remains high, even for mixed-use properties, although the opportunities do
Source: CBRE Research
not abound. Investor interest has grown in those sectors that have proven to be the
most robust during the pandemic, especially retail parks, which suffered less from
restrictions, and grocery, as they carry essential goods. For retail parks, investors are
struggling to find sufficient big-ticket, high-quality product to match their strategies.
For grocery, the trend for occupiers is towards sale & lease-back transactions or joint
Investors remain interested in the retail park and
grocery sub-asset classes as these proved more €1.4 bn
ventures, with this often part of a plan to reinvest resources raised to develop and robust during the pandemic. Retail investment volume in 2021,
upgrade distribution networks. -5% on 2020
21 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Cautious optimism for retail in 2022
Retail performance recovery could mean the gap in Fig. 17: Retail prime yield by asset class, % ESG: a strategic resource for positioning
property price expectations between owners and 8 Renewing the retail properties will become an increasingly central
potential buyers could narrow 6 topic, especially for the shopping centre industry, where the
Investors looking to invest in the retail market will probably continue progressive obsolescence of Italian stock will fuel the performance
4 gap between the most innovative centres and those unable to meet
to adopt a selective approach in 2022, favouring those segments that
are the least exposed to the pandemic and locations of primary 2 tenants’ and customers’ requirements. Landlords will need to be
standing. able to certify that demanding ESG standards are being met, both
0
to help move into line with the sustainability policies adopted by
The increase in leasing activity seen in 2021 for retail space in prime retailers and to guarantee visitors improved healthcare safety and
and good secondary locations suggests a drop in vacancy rates in greater environmental comfort. Shopping centres will also have to
shopping centres and high streets in 2022. In combination with the High Street Shopping centres
Retail Park Supermarkets position themselves as playing a "civic" role in their catchment
uptick in retail sales due to the lifting of restrictions imposed to limit BTP 10 years areas by offering services, cultural initiatives and entertainment
the spread of the virus, this factor could encourage new product in Source: CBRE Research opportunities.
which to invest to reach the market and cause the gap in price
expectations between landlords and potential buyers to close, as has
14.3%
already been seen with the stabilising of prime yields during 2021 Fig. 18: E-commerce penetration trend, %
(Fig. 17). 40
However, it will still take some time before any fully-fledged recovery
is evident in retail investment and the uncertainty that shrouds this 30 CBRE’s forecast
sector looks likely to continue in the coming months. First, the growth 20 e-commerce penetration
of e-commerce will remain a critical aspect for investors, even though in Italy in 2025
growth margins in this sphere are forecast to be less in Italy than in 10
other European countries (Fig. 18) and growing integration with
0
physical sales channels is likely. Second, during this phase of the Italy Spain France Germany Netherlands United The upturn in demand for space by retailers
recovery, landlords will continue to offer significant incentives and Kingdom
substantial flexibility, despite rents, in the absence of incentives, and increased retail sales will sustain the
2015 2019 2021 2025
remaining largely in line with pre-Covid-19 values. recovery in the retail real estate market in
Source: CBRE House view
2022.
22 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Retailer performances improve while leasing activity intensifies
Turnover and footfall in shopping centres exceeded Fig. 19: KPIs of shopping centres managed by CBRE, Leasing activity improves in high streets
pre-Covid-19 levels in October. December and percentage change over the same month of 2019, % The high street segment is showing positive signs, once again
November saw a drop due to the new infection wave 150 starting from the prime locations. In such cases, the willingness of
2021 performance figures for shopping centres managed by CBRE owners to offer tenants incentives has sustained the rise of new
show a recovery in the main KPIs compared to 2020, although still negotiations, which will continue to focus on pre-pandemic headline
down on 2019, partially due to weekend closures during the first 100 rents, supported by an increase in temporary incentives such as
half of the year (Fig. 19). The opening up of the country, the drop in longer step-rent, free-rent periods, capital contributions and greater
virus cases in the summer and autumn 2021 and the progress in the flexibility with contract duration. On the tenant side, there is greater
vaccine campaign helped drive a recovery in turnover, which moved 50 demand for a reduction in the fixed rent component, compensated
above 2019 values for the first time since the start of the pandemic by a greater turnover-linked contribution. For the time being, the
in October. The final two months of the year were negative because use of full formula turnover rent remains largely limited to
of the rapid spread of the virus once more, but the figures were secondary locations where the vacancy risk is higher.
0
nonetheless better than compared to the same months in 2020. Despite the recovery, retailers are remaining cautious in
The best performing sectors were electronics, household goods and development and expansion activities. Ensuring rents are
sportswear. Restaurants and bars in shopping centres continued to sustainable in relation to turnover has become a key point: even in
-50
struggle as the upturn in footfall was only partial. Despite this, the most prestigious streets, there is less willingness to spend on
restaurants and food courts continue to be valued as strategic top locations in order to promote brands. The pre-pandemic trends
aspects for relaunching shopping centres once the pandemic has remain unchanged for large floor areas, where retailers demand
-100 remains low or constrained by the large overall rents landlords
died down. As such, owners will continue to support tenants via
incentives, helping to keep leasing activity strong in this segment. charge for such locations.
The increase in vacancy in shopping centres during the pandemic is
not a major source of worry for prime centres. Leasing activity in
Retailers are optimistic in the medium
Average ticket
the CBRE-managed shopping centres remains sustained by Footfall term. Headline rents in prime locations
significant tenant incentives, but it also suggests a return to Turnover, including Food Anchor
standard baseline vacancy rates once the virus spread slows and n. of tickets remain at pre-Covid-19 values, but the
restrictions end.
Source: CBRE Research weight of incentives is increasing.
23 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Key Takeaways
01 INVESTOR FOCUS WILL REMAIN ON THE MOST RESILIENT SUB-ASSET CLASSES
Investor interest in the retail market will continue to concentrate on those segments that are least subject to
possible new restrictions, especially the grocery and retail park sectors.
02 RECOVERY IN THE PERFORMANCE OF SHOPPING CENTRES WILL DRIVE AN UPTICK IN INVESTMENT
The good sales results from the final quarter of 2021 highlight the sector's capacity for recovery and will support
investor interest for the best performing assets.
03 AN OMNICHANNEL APPROACH WILL BE INCREASINGLY CENTRAL TO RETAILERS' STRATEGIES
E-commerce will continue to grow, but at a slower pace than in the last two years because of the lifting of
restrictions on physical stores. Integration between the digital and physical channels will continue to grow.
04 FLEXIBILITY AND GREATER INCENTIVES WILL CONTINUE TO INFLUENCE NEGOTIATIONS
Retailers will continue to place significant importance on sustainable rent during negotiations. The common
ground with landlords will largely remain major incentives for the first few years, followed by headline rents that
are largely unchanged from pre-Covid-19 levels.
05 ESG POLICIES WILL PLAY A STRATEGIC ROLE IN THE POSITIONING OF SHOPPING CENTRES
Development and regeneration projects for retail assets will increasingly focus on environmental and social
sustainability. Meeting demanding environmental standards will become more and more fundamental in
attracting clients and in supporting retailers' ESG strategies.
24 CBRE RESEARCH © 2022 CBRE, INC.05 Logistics
Intelligent Investment Real Estate Market Outlook 2022 | ITALY
2021 - a record year for investment in logistics
Major competition among foreign investors is further compressing
initial yields Fig. 20: Logistics investment volume by risk profile and prime yield
In 2021, investment volumes in the Italian logistics market reached record levels, at €2.7
billion, +89% on 2020 (Fig. 20), thus topping all the other asset classes for the first time. €M %
This record has been achieved thanks to further growth in the presence of international 3,000 7
institutional investors, who mainly entered the Italian market in 2021 by purchasing
2,500 6
stabilised properties portfolios.
During the year, the Italian logistics market continued to be very attractive to foreign 5
2,000
capital both because of intense occupier demand and because the real estate yields are
4
still marginally higher than those in the main European markets. Nonetheless, major 1,500
competition to purchase logistics assets and portfolios had a significant impact on 3
Italian yields (Fig. 20), moving them towards the values found in the most sought-after 1,000
European markets. 2
This trend encouraged investors to look for ways to gain greater returns, undertaking 500 1
development initiatives or purchasing properties with limited WALBs to be repositioned.
Seeking higher returns has also pushed interest in investing in secondary markets with 0 0
intense demand for logistic space by occupiers. The significant liquidity of logistics 2015 2016 2017 2018 2019 2020 2021
assets is also encouraging sales of owner-occupied properties through sale and Core Core+ Value-Add Opportunistic Prime yield (%)
leaseback transactions, in order for the previous owners to reinvest in restructuring
their distribution networks.
Source: CBRE Research
Investor expectations for the Italian logistics market are very positive. The results of the
CBRE Investor Intentions Survey 2022 show that the logistics sector will be one of the
main investment targets in the year that has just begun. More specifically, the survey
found substantial interest in the last mile, which 69% of interview respondents (the
highest for all asset classes) saw as one of the most promising sectors for investment in
The significant pressure on yields encourages
investors to look at acquisitions in secondary 3.95% €2.7 bn
Italy in 2022. markets and to undertake developments in Prime Yield for Investment volume in
logistics logistics in 2021,
order to achieve greater returns. +89% on 2020
26 CBRE RESEARCH © 2022 CBRE, INC.Intelligent Investment Real Estate Market Outlook 2022 | ITALY
Tenant demand for logistics space continues to grow
Growing occupier demand for last mile properties and Fig. 21: Total take-up trend and share of last mile E-commerce and omnichannel retail will continue to
secondary locations .000 sq m % sustain take-up growth
In 2021, robust occupier demand for space saw a new take-up 3,000 15 In 2022, demand for logistics space is expected to further increase,
record, at 2.4 million sq m, marking growth of 6% compared to 2020 12 driven by the spread of e-commerce and retailers deploying
(Fig. 21). 2,000 omnichannel strategies.
9
During the year, the main trends that emerged in 2020 6 The pandemic has significantly accelerated the integration of
consolidated, especially the rapid growth in occupier demand 1,000 physical and digital retail, making it necessary to refine the
driven by the spread of e-commerce. Over 50% of absorbed floor 3 distribution networks of retailers.
area in 2021 went to e-commerce activities or omnichannel retail, 0 0 The increasing capillarity of e-commerce services needs to be
often carried out by 3PL providers (45% of take-up volumes). backed by widespread and diversified supply of logistics spaces,
The interest in the last mile segment further increased, accounting Total take-up % share of Last mile including locations outside the main distribution hubs.
for 12% of take-up volumes in 2021 (Fig. 21). Compared to 2020, the Source: CBRE Research Growing occupier demand in such locations, which are often
number of transactions in this segment grew by 14%. The most in- characterised by a lack of high-quality properties, has solely been
demand spaces are mid-sized ones, between 10,000 sq m and handled thus far by built-to-suit developments. Today, the intensity
20,000 sq m. Fig. 22: Take-up share by location
of occupier demand is beginning to justify speculative
The Milanese logistics area remains the most sought-after by developments, as it already occurred in the more established
tenants, accounting for 43% of total take-up volumes in 2021. markets in recent years.
2021 43% 10% 6% 19% 22%
Nonetheless, the spread of e-commerce and the need to be closer
to the end consumer have driven strong demand for secondary
locations, accounting for 22% of absorption volumes in 2021.
This trend can be also linked to the progressive lack of product and Take-up growth in secondary markets will
limited development opportunities in most of the well-established 2020 66% 12% 6% 11%
markets, causing greater interest by logistics operators in Tuscany, be sustained by occupiers needing to
Campania, Puglia and the Turin logistics area (Fig. 22). expand their logistics networks and reach a
Milan Bologna Rome Veneto Naples Other
Source: CBRE Research growing number of consumers.
27 CBRE RESEARCH © 2022 CBRE, INC.You can also read
