ITALY Trends and Developments Contributed by: Gabriele Capecchi, Giovanni Manno and Giuliana Serra, Legance
ers of the Italian real estate market, smaller cities and rural regions are experiencing a remarkable growth in demand, which will probably remain constant during 2025. Many Italians, seeking more green spaces and a better quality of life, are investing in second houses outside major urban centres, and for - eigners are increasingly looking for holiday hous - es. The real estate market in southern regions is also experiencing a renewed interest, partially attributable to the attractiveness of significantly lower prices per square meter than the national average and to the growing community of digital nomads seeking more affordable living options. This renewed interest is also driven by entities and associations’ efforts to bridge the econom - ic, social and territorial gap between Northern and Southern Italy. The Italian luxury market performed well in the second half of 2024, and this trend will likely be confirmed in the current year. This growth is primarily attributed to foreign investments, with high-net-worth individuals increasingly drawn to properties that blend traditional Italian charm with modern amenities. This trend is particularly evident in Milan, Rome and Florence, where demand for luxury apartments and villas remains strong. Commercial Real Estate Market: Office, Retail and Industrial Sectors It is worth noting that the Italian commercial real estate market is also undergoing significant changes, as evidenced by a shift in demand observed in the first three months of this year. While the rise of remote work has impacted demand for office spaces, other sectors, such as logistics and industrial spaces, are perform - ing well.
Hybrid work models have drastically changed the demand for traditional offices, with com - panies opting for smaller, more flexible setups. However, in major business hubs and, in par - ticular, with regard to premium office spaces, demand remains relatively stable. Many profes - sional realities, especially in Rome and Milan, are trying to reverse the smart working trend, prioritising the presence of employees on-site as an essential condition for team building and increased company performance. As a result, in most cases, offices have been rethought as spaces suitable for creating an optimal working environment, offering modern services and sus - tainable features. The retail sector is also undergoing significant transformation. On the one hand, retail spaces in the most prestigious areas continue to thrive, especially in the cities of Milan and Rome, which remain global shopping destinations. On the other hand, the rise of e-commerce has led to a surplus of retail spaces in less frequented areas, forcing property owners to revise their leasing strategies. In contrast, industrial real estate, particularly warehouses and logistics centres, has experi - enced a boom due to the rise of e-commerce. Demand for distribution centres in strategic locations, especially near Italy’s major ports and transportation hubs, grew throughout 2024, and this trend is expected to remain strong in 2025. Rental Market: Current Situation and Future Outlook Similarly to the property market, the rental mar - ket in Italy has experienced relevant growth throughout 2024, with increased demand for both short-term and long-term rentals. The rise in rental prices has been particularly notable in metropolitan areas and tourist destinations,
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