There are several ways of evaluating where, when and how to invest in real estate due to the various changing conditions. The market is diverse and includes sectors such as office, residential, retail, industrial, leisure and hotel based real estate, as well as the rapid growing areas of student property and healthcare. The hotel industry continues to attract a significant share of capital together with the logistics sector, while the office sector shows contractions or growth depending on the city. The vacancy rate is also slightly increasing, although unevenly, across cities.
Italy is an ideal place for the vast choice it offers in the long-term perspective in all sectors. Many foreign investors are coming to Italy to benefit from the dual weakening of the European currency and a favorable loan system. There are loans on the market aimed at improving the energy efficiency of buildings that guarantee relative tax advantages which means not only new purchases but also renovations.
Investments are mostly concentrated in the retail sector. The segment, which confirms itself as a strategic asset for investments, recorded significant growth in Turin, even if in general the Milan market has been confirmed as the most fluid among the Italian cities, while the share of capital invested in Rome has been considerably reduced. At European level, during 2018, the volume of retail real estate transactions involved € 56 billion in investments, making retail properties the second asset class in terms of volume transacted after offices, including retail parks, outlets and stores along the central streets of major cities, which appear to be the safest investments.
The above-mentioned growing interest in alternative types of assets such as healthcare residences, student housing, & cinemas, are acquiring increasingly important percentage shares compared to the total volume invested. In many aspects, new property is considered expensive, and many prefer to restructure or buy land for construction far from the downtown area. There is a growing correlation between rising real estate prices and long-term investments.
For a long-term investments, land is also proving a valuable secure strategy, however, it is quite hard to properly identify land with development potential and then operate by developing residential, commercial, agricultural or mixed-used sites.
On a rather high-risk level, investors are opting to build real estate, but securing a mortgage is often more difficult than for older properties, as the property has yet to establish its value on the open market. However, many investors are attracted by the Build-to-Rent sector, even if it surely is a long-term goal.