di Cormac Mac Ruairi, Deals Editor Property EU
Milan reaffirmed its position as one of the few bright spots in the zero-growth Italian economy by claiming more than 50% of the country’s commercial real estate investment in the first half of 2015.
The capital of the northern province of Lombardy proved the main port of call for new inflows of global institutional capital that is now active in the Italian market alongside opportunistic investors mainly from North America.
While the Italian economy in the main remains ‘anaemic’, international investors are being attracted by long overdue political and economic reforms being enacted by prime minister Matteo Renzi. The waves of international capital accounted for 77% of the estimated €4.3 bn of real estate investment during the first five months of 2015, according to a market report published by Savills.
Given its position as Italy’s financial and business powerhouse and the city with the fourth-largest GDP per capita in Europe (€34,000 compared to €23,500 average for Italy in 2008), Milan is – unsurprisingly – the main beneficiary of these inflows.
Office-led schemes in Milan were the most sought-after commodity in H1 among a host of investors hailing from the Middle East, China, North America and other European countries.
The largest transaction by far – equivalent to 28% of the Italian total for the first five months – involved Qatar’s sovereign wealth fund QIA finalising its two-part acquisition of the Porta Nuova mixed-use scheme in central Milan for €1.2 bn. The first tranche of the deal had a volume of about €800 mln.