ITALY Law and Practice Contributed by: Guido Alberto Inzaghi, Ivana Magistrelli, Silvia Gnocco and Gabriele Paladini, SI – Studio Inzaghi
Market sentiment suggests the start of a down - ward trend in yields, with prime yields contract - ing to 5.4% after two years of stability. After a subdued start to the year, the living sector experienced a resurgence in the fourth quarter, recording the highest quarterly invest - ment volume in two years, with nearly EUR300 million transacted. However, the annual total of approximately EUR560 million marked a 20% decline compared to 2023. The fourth quarter’s strong performance was largely driven by three significant transactions in the student housing segment, totalling over EUR160 million. Two of these deals hold particular significance as they represent some of the first core-profile transac - tions in Italy’s student housing market. Investor demand for technological infrastructure and healthcare assets remained strong, with the alternatives sector registering an investment vol - ume of approximately EUR1.3 billion. Notably, education and data centre assets also saw sub - stantial investment growth. The hospitality sector, already a key performer in 2023, achieved another significant increase in investment activity, rising by 66% year-on-year to reach approximately EUR1.8 billion in 2024. The luxury hospitality segment remains a prior - ity for investors, particularly in Rome, where an active pipeline of high-end openings continues to drive market momentum. Generally speaking, the Italian real estate market in 2024 therefore demonstrated resilience and a positive trend, influenced, among other things, by a series of interest rate cuts by the European Central Bank (the “ECB” ), which started in June 2024. These reductions aimed to counteract slowing inflation and stimulate economic activ - ity. The ECB’s decision to lower the deposit rate
by 25 basis points to 2.5% in October 2024 was driven by an updated assessment of the infla - tion outlook and the strength of monetary policy transmission. This rate cut, along with previous reductions, helped ease borrowing costs, making mort - gages more affordable and encouraging prop - erty transactions. Overall, the combination of declining inflation and lower interest rates in 2024 played a pivotal role in stimulating Italy’s real estate market, leading to increased property sales and a positive outlook for the sector. The most significant deals in 2024 included the following. • In November 2024, Mohari Hospitality, in partnership with Omnam Investment Group, acquired the Hotel Bauer in Venice for approximately EUR300 million. The new own - ers plan to continue the ongoing renovation of the hotel, with Rosewood Hotels & Resorts chosen to operate the hotel once it reopens. • In April 2024, Kering acquired the historic Palazzo del Monte located at Via Monte Napoleone 8 in Milan for approximately EUR1.3 billion. This 18th-century building covers a total area of 11,800 square metres, with over 5,000 square metres dedicated to retail space. • In February 2024, Deka Immobilien, a promi - nent European real estate investment compa - ny, acquired the historic office building at Via Vittorio Veneto 89 in Rome from Ardian and Prelios SGR. The building offers approximate - ly 23,000 square metres of leasable space across eight floors aboveground and four underground levels, including parking facili - ties. The property serves as the new Rome headquarters for Deloitte Italy.
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