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News Release

Italian real-estate investment opportunities to grow during 2012

Positive fundamentals suggest Italy is platform for investor growth over the next 18 months

London, 29 November, - Despite on-going financial concern across the Eurozone region, Italian real-estate investment has the potential to be a platform for growth in the medium term, according to Jones Lang LaSalle research.
Robert Stassen, Head of EMEA Capital Markets Research at Jones Lang LaSalle commented: “Italian real estate investment has been flat since 2007, with average quarterly investment volumes of €1 billion per quarter. There is the potential for considerable upside in 2012 and beyond as investors re-consider the next opportunity as country risk subsides. We may also see more international investment move into Italy as the Eurozone crisis calms down.”
Patrick Parkinson, Managing Director, Head of Capital Markets Italy at Jones Lang LaSalle said: “Whilst Italian government bond yields have hit peaks similar to that of Greece and Portugal, prime yields on Italian real-estate remain strong and are 100 basis points higher than yields on similar French and Swedish property. Whilst investors are right to feel cautious, we expect more to dip their toe into the water and embrace these opportunities.”
Whilst consumer spending has been weak, Italy’s citizens are some of the richest in the world with average net assets of eight times disposable income. Combined government and household debt is 170%, compared to 240% for the UK.
Robert Stassen added: “We have also seen strong numbers from shopping centre REITS with assets in Italy. In addition, major shopping centre developers such as Westfield and Eurocommercial are investing in Italian cities such as Milan and Turin. With this backdrop, we expect more newcomers to take a closer look at the region in the next few months.”, possibly as a counterbalance to a liquid Paris market and falling volumes in Spain.”
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Notes to editors
Italian real estate investment has been mainly flat since the drop from the 2007 peak. Italian average quarterly volumes have remained stable around the €1.0 billion level.
In France, core investors have been driving up volumes by buying in the liquid Paris market.
In Spain volumes have fallen further attracting increasing numbers of opportunity funds.
Once the current nervousness disappears, Italy might be one of the next target markets for these investors.