ITALY REAL-INVEST
ITALY REAL-INVEST 2014 Copyright © 2014 World Capital. All Rights Reserved.
Annual Italian Real Estate Market Report
Con il patrocinio dell'ICE - Agenzia per la promozione all'estero e l'internazionalizzazione delle imprese italiane
Copyright © 2014 World Capital. All Rights Reserved.
ITALY REAL-INVEST
Italy In European Context
Annual In�ation Rate
Population Density - Europe
Gross Fixed Investment
Foreign Direct Investment Stocks
Foreign Direct Investment Flows as a percentage of GDP
Gross Domestic Product
Italian Regions Population Density
Italian Regions by GDP Per Capita
GENERAL OVERVIEW OF ITALIAN REAL ESTATE
Italian Real Estate Segments
Residential Sector
European Residential Market
Residential Sector Performance - Europe Prime Markets
Net Yield Of Urban Residential Properties By Region
Italian Household Wealth And Its Components
Tenancy Status -Italy
Number of Constructed Dwellings - Italy
Building's long Life span
O�ce Sector
Annual Rent - Prime locations by Continental Ranking
Annual Rent - Prime Global locations
Rental Variation Rate - Prime Global locations
Vacancy Rate- Prime Global locations
Main Italian O�ce Markets-Annual Rent -Annual Yield
Investments in the O�ce Sector - Italy
Retail Sector
Italian High Streets
Annual Rent - Worldwide High Streets
Prime Retail Markets - Italy
Retail Property Supply- Italian Market
Annual Rent - Italian High-Streets
Yield Trends- Milan and Rome
Consumer con�dence
Consumption Trends - Italy
Industrial Sector
European 3PL Warehouse Map
Lease Trends - Europe Prime Logistic Locations
Market Dynamics - Italian Prime Logistic Locations
Lease Ranges - Italian Prime Logistic Locations
Italian Publicly Subsidised Freight Villages (Interports)
Lease Ranges - Italian Publicly Subsidised Freight
Villages
Hospitality Sector
Tourists Presence In Hospitality Facilities- Europe
Hotel Supply and Occupancy Rates - Europe
Hotel Demand Dynamics - Italy
Hotel Supply Dynamics - Italy
Hotel Supply - Italy
Hotel Revenues - top 10 locations by revenue per night and tourism �ows
Hotel Revenues -top 10 locations by revenue per night - Italy
Tourism Flows - Italy
2
3
3
4
4
5
5
6
6
8
9
10
12
13
13
14
14
15
15
16
17
18
19
20
21
21
22
24
25
26
26
27
28
30
31
32
34
35
36
37
38
39
40
42
43
44
46
46
47
48
48
Index
Annual Italian Real Estate Market Report - 2013
1
Con il patrocinio dell'ICE - Agenzia per la promozione all'estero e l'internazionalizzazione delle imprese italiane
ITALYRegionsProvincesMunicipalitiesPopulationForeign residentsNumber of familiesAverage family members
20110
8.09260.626.442
4.570.31725.175.793
2,4
ITALY REAL-INVEST2
Population Density - Europe Year 2013
Inhabitants per square kilometreSource: Eurostat
Annual In�ation RateYear 2013 Consumer Price IndexSource: Eurostat
0.00-0.850.9-1.71.7-2.62.6-3.4
3-1717-3030-4343-56
2-2727-5252-77
77-102102-4,080
4,080-8,0608k-12k
12k-16k
ITALY REAL-INVEST 3
2012 2009 2010 2011 2012 Europe
Italy 364.5 328.1 339.2 - 486.4 489.7 520.0 - Italy Poland 185.2 215.6 198.2 230.6 29.3 44.4 49.7 57.5 Poland Spain 632.3 628.3 622.1 634.5 625.8 653.2 642.4 627.1 Spain Sweden 332.1 347.2 344.1 376.2 353.4 373.0 376.7 406.9 Sweden Switzerland 499.6 617.7 644.9 665.6 864.9 1 032.8 1 063.1 1 129.4 Switzerland Turkey 143.7 187.0 140.0 181.1 22.3 22.5 26.4 30.5 Turkey
Czech Republic 125.8 128.5 120.6 136.4 14.8 14.9 13.2 15.2 Czech Republic Denmark 154.1 139.9 140.3 - 213.1 218.9 229.0 - DenmarkEstonia 16.2 16.5 16.7 18.8 6.4 5.7 4.7 5.8 EstoniaFinland 85.2 86.7 88.9 90.0 130.2 137.7 133.6 142.3 Finland France 985.2 948.4 953.2 - 1 492.6 1 536.1 1 581.4 - France Germany 969.6 943.8 927.5 980.7 1 359.2 1 365.6 1 385.5 1 463.2 Germany Greece 42.1 35.0 29.2 37.8 39.5 42.6 43.7 43.7 Greece
Memo items: Memo items:
EUROPEAN UNION 7 642.0 7 526.7 7 568.9 - 8 965.1 9 215.1 9 463.5 - EUROPEAN UNION TOTAL WORLD 18 203.1 19 859.9 20 730.4 - 19 083.9 20 539.1 21 673.9 - TOTAL WORLD
G-20 countries 10 270.1 11 381.5 12 043.7 - 12 083.2 12 965.5 13 719.9 - G-20 countries OECD G-20 countries 7 551.0 7 962.3 8 304.0 - 10 858.3 11 483.5 12 172.9 - OECD G-20 countries Other G-20 countries 2 719.1 3 419.2 3 739.7 - 1 224.9 1 481.9 1 547.0 - Other G-20 countries Argentina 79.9 87.6 94.9 - 29.4 30.3 31.9 - Argentina
Brazil 400.8 674.8 669.7 696.0 164.5 188.6 202.6 232.8 Brazil China 1 314.8 1 476.4 1 804.2 - 245.8 310.8 364.2 - China India 171.4 205.6 206.5 226.4 80.9 96.9 109.5 118.2 India Indonesia 108.8 160.7 185.8 - 3.9 6.7 6.2 - Indonesia Russia 378.8 490.6 457.5 - 302.5 366.3 362.1 - Russia Saudi Arabia - - - - - - - - Saudi Arabia South Africa 117.4 153.1 134.4 - 72.6 89.5 78.5 - South Africa
Europe 2009 2010 2011
13-1515-1717-1818-2020-2626-3131-3737-42
Gross Fixed InvestmentYear 2013
Percentage of GDP Source: Eurostat
Foreign Direct Investment StocksYear 2013 Source: OECD International direct investment database
INWARD OUTWARDUnits: USD billion Units: USD billion
ITALY REAL-INVEST4
2012 2009 2010 2011 2012 Europe
Italy Italy Poland Poland Spain Spain Sweden Sweden Switzerland Switzerland Turkey Turkey
Czech Republic Czech Republic Denmark DenmarkEstonia EstoniaFinland Finland France France Germany Germany Greece Greece
1.5% 3.1% 1.1% 5.4% 0.5% 0.6% - 0.7%1.3% - 3.8% 0.3% 2.0% - 4.0% 1.7%9.6% 8.4% 1.2% 6.7% 8.1% 0.7% - 4.0%0.3% 2.8% 1.0% - 2.4% 4.3% 1.9% 1.8%0.9% 1.2% 1.5% 2.4% 4.1% 3.0% 3.3% 2.4%0.7% 1.7% 1.4% 0.2% 2.1% 3.7% 1.4% 2.0%0.8% 0.1% 0.4% 1.2% 0.6% 0.5% 0.6% -1.0% 0.4% 1.3% 0.4% 1.0% 1.6% 2.2% 1.5%3.0% 3.0% 3.7% 0.7% 1.1% 1.5% 1.4% -0.7% 2.9% 1.8% 2.1% 0.9% 2.7% 2.5% -2.5% - 1.7% 2.6% 6.4% 4.4% 5.2% 6.4%5.7% 5.9% 1.8% 0.6% 5.2% 14.4% 7.2% 7.1%1.4% 1.2% 2.1% 1.6% 0.3% 0.2% 0.3% 0.5%
2.4% 2.4% 2.7% 2.0% 2.6% 3.4% 3.4% 2.5%1.5% 1.7% 1.9% 1.6% 1.8% 1.9% 2.0% 1.7%1.2% 1.3% 1.5% 1.2% 2.1% 2.2% 2.5% 2.2%2.5% 2.6% 2.7% 2.5% 0.9% 1.0% 0.8% 0.7%1.3% 1.9% 2.0% 2.3% 0.2% 0.3% 0.3% 0.2%1.6% 2.3% 2.7% 2.7% - 0.5% - -2.3% 3.1% 3.1% 3.1% 0.9% 1.0% 0.6% 0.8%2.6% 1.7% 2.0% 1.3% 1.2% 0.9% 0.7% 0.4%0.9% 1.9% 2.3% 2.2% 0.4% 0.4% 0.9% 0.6%3.0% 2.1% 2.0% 1.6% 3.6% 2.8% 2.6% 1.6%9.7% 6.4% 2.7% 2.1% 0.6% 0.9% 0.6% 0.5%2.0% 0.3% 1.5% 1.2% 0.4% - 0.7% 1.1%
Memo items: Memo items:
EUROPEAN UNION EUROPEAN UNION G-20 countries G-20 countries
OECD G-20 countries OECD G-20 countries Other G-20 countries Other G-20 countries Argentina Argentina
Brazil Brazil China China India India Indonesia Indonesia Russia Russia Saudi Arabia Saudi Arabia South Africa South Africa
Europe 2009 2010 2011
1-4747-9292-138138-184184-962962-1,7401,740-2,5182,518-3,296
Gross Domestic ProductYear 2013 Source: Eurostat
Foreign Direct Investment Flows as a percentage of GDPYear 2013 Source: OECD International direct investment database
INFLOWS OUTFLOWSUnits: % Units: %
ITALY REAL-INVEST 5
ITALY REAL-INVEST6
Italy Land of Beauty
ITALY REAL-INVEST
Italian Regions Population DensityYear 2013 Inhabitants per square kilometreSource: ISTAT (Italian National Institute of Statistics)
< 100
101 - 200
201 - 300
300 <
Italian Regions by GDP Per CapitaYear 2013
Italy annual Index number=100Source: ISTAT (Italian National Institute of Statistics)
<75,0
75,1 - 95,0
95,1 - 115,0
115,1<
7
GENERAL OVERVIEW OF
ITALIAN REAL ESTATE
<1.5%
1.5% - 3%
3% - 4.5%
4.5% - 6%
6% - 8%
8% <
19562013
Italian Regions Land ConsumptionSource: ISPRA
ITALY REAL-INVEST8
ITALY REAL-INVEST
Residential
Italian Real Estate Segments
LuxuryMid rangeVacation house
OfficesBusiness DistrictsMiscellaneous
RetailHigh streetsRetail parksCommercial centresOutlets
IndustrialProduction plantsLogistic
HospitalityHotelsAgritourismsLeisure (Golf Clubs-Stadiums)
9
Residential Sectore
In Italy buildings are made with a very high quality of standards objective to last for a long period of time;
historical context of Italy makes it one of the prestigious real estate markets with high and everlasting values;
constant domestic demand for residential real estate;
recent acceleration in external demand for residential property from international clien-tele, especially from those requesting the Italian residence permit;
growth of new development potentials with high pro�tability such as the university residence, residences for the elderly and etc..
Why invest in Italian residential sector?
ITALY REAL-INVEST10
1. Luxury Penthouses In Historical Centers
Villas In periferies
ITALY REAL-INVEST
2. Vacation house Mountainside Seaside Lakeside
In Italy, the term “holiday home” is also known as “second home”. In this category we �nd homes bought in tourist destinations or close to the buyers’ hometowns. This last one is especially the case of southern Italian migrant workers who have left their places of origin to �nd employment in the north-ern Italy or abroad. The riches they were able to gather through hard work have been subsequently reinvested on the basis of personal and emotional factors rather than economic, investment-oriented ones. In recent years though, the �nancial crisis and the necessity to cut down on management costs have pushed many owners to put their holiday homes up for sale. This has resulted in property price �uctuations in various Italian locations.
3. Mid rangeIn Historical Centers
Apartments In Peripheries
Apartments Villas
11
A home to live in is something that Italians cannot do without. It is not by chance that starting from the post WWII years onward, housing is what has absorbed the largest part of Italians’ private capital. Investing in ‘the brick’ quickly became a national priority. On the other hand it is necessary to mention that the residential as well as the so-called “holiday home” sub sectors of real estate, have been hit the hardest by the on-going world �nancial crisis. In Italy, the number of transactions has severely shrunk and property values have considerably decreased, although not as steeply as in Spain and other euro-zone countries. A major factor in�uencing the depre-ciation of property has been the surplus of unsold buildings that had been built thanks to a strong leverage and that were, as a consequence, put on the market at lower prices.
European Residential Market€/sq mYear 2013 Source: World Capital and Global Property Guide
9651151123217411831206520812156223822392244237123732573274828072905309431083124330633303536363037503758393342344567
566961886220
699111229
1222712610
2425239273
0 5000 10000 15000 20000 25000 30000 35000 40000
MoldovaBulgariaMacedoniaPortugalHungaryEstoniaCroatiaLatviaCyprusSerbiaSlovak RepublicRomaniaLithuaniaSloveniaMaltaUkraineTurkeyMontenegroPolandBelgiumGermanyAndorraGreeceSpainIrelandCzech RepublicDenmarkNetherlandsAustriaLuxembourgItalyFinlandSwedenFranceRussiaSwitzerlandUnited KingdomMonaco
ITALY REAL-INVEST12
Piem
onte
Ligu
ria
Lom
bard
ia
Vene
to
Friu
li V.
Giu
lia
Emili
a Ro
mag
na
Tosc
ana
Mar
che
Umbr
ia
Lazio
Abru
zzo
Mol
ise
Cam
pani
a
Pugl
ia
Cala
bria
Basil
icat
a
Sard
egna
Sici
lia
Valle
D’A
osta
5,0%
4,0%
3,0%
2,0%
1,0%
0,0%
Net Yield Of Urban Residential Properties By RegionYear 2013Source: Elaboration by World Capital on data from Banca of Italy - Agenzia del Territorio - ISTAT
70
90
110
130
150
170
190
210
230
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Germany France Italy UK Spain Irland Euro area
Residential Sector Performance - Europe Prime MarketsPrice index (31/12/2000 = 100)2000 - 2013Source: Elaboration by World Capital on data from OECD - Bank of Italy - Agenzia del Territorio
ITALY REAL-INVEST 13
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
100%
80%
60%
40%
20%
0%
Rent
Social Housing
Owner
Tenancy Status -ItalyPercentage Year 2013 Source: Bank of Italy
Prediction
10.000
9.000
8.000
7.000
6.000
5.000
4.000
3.000
2.000
1.000
0
-1.0001995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Phisical asset Financial assest Financial liabilities Residential Property Italian household wealth
Italian Household Wealth And Its Components1995-2011Billions of euro at current pricesSource: Bank of Italy
ITALY REAL-INVEST14
Number of Constructed Dwellings - ItalyYear 2013Source: Euroconstruct
In recent years, the construction of new residential buildings has decreased by 40,4%. This implies that the number of houses completed has therefore almost halved.Under such circumstances, only investments aimed at the requali�cation of properties have maintained their edge (+0,5%) in the past twelve months. This positive trend is the result of �nancial subsidize for the renovation of residential property in Italy. In light of this, it is safe to say that this policy is a key factor in further developments in the construction market.
In Italy, the lifespan of real estate products is guaranteed by speci�c �scal regulations that subsidize proper maintenance and/or renovation. Since 2012, the conservation and rehabilitation of existing real estate assets have become key directives of the country’s �scal policies. Thanks to these favora-ble �scal premises, not only maintenance interventions on buildings, but also improvement and modernization operations are eligible for up to 55% subsidize of the total cost. Such �scal policies are paired with state of the art construction materials which ensure a property lifespan of over 50 years, thereby adding to the already high quality level of Italian real estate assets. Renovation subsidies are aimed at coping with:
- Changes in demand
- Increased attention to environmental and energetic sustainability
- The need to redevelop degraded urban areas
- The need to increase the productivity and pro�tability of properties
- Exert greater control over land use consumption
Elevated Building LifespanBuilding Renovation Subsidize up to 55% of the total costsSource: www.agenziaentrate.gov.it
350
300
250
200
150
100
502005 2006 2007 2008 2009 2010 2011 2012 2013 2014
PREDICTION
ITALY REAL-INVEST 15
Office SectorBusiness DistrictMiscellaneous
ITALY REAL-INVEST16
The Italian O�ce real estate will be a�ected by interventions renewal and redevelopment;
The change in the socio-economic structure is transforming the Italian enterprises with the emergence of new service companies;
Policies to support youth entrepreneurship has made Italy a prime incubator for start-ups;
Italian tourism enterprise together with "Made in Italy", with their remarkable service com-panies, have generate strong attractions for foreign Investors;
Milan Expo 2015, will be an important moment for the entire Italian system including foreign companies interested in opening o�ces in Italy.
Why invest in Italian o�ce sector?
Annual Rent - Prime locations by Continental Ranking€/sq m paII semester 2013 Source: World Capital
Asi
a - P
aci�
cEu
rope
Am
eric
as
0 200 400 600 800 1000 1200 1400
SeoulKuala LumpurMelbourneMumbaiDubaiSydneySingaporeNew DelhiBeijingShanghaiTokyoHong KongBudapestBarcelonaPragueWarsawBrusselsMadridSt. PetersburgRomeIstanbulFrankfurtMilanOsloStockholmParisZurichMoscowLondon west endLimaVancouverBogotaSan FranciscoSao PauloRio de Janeiro
Milan
Rome
ITALY REAL-INVEST 17
Annual Rent - Prime Global locations €/sq m pa II semester 2013 Source: World Capital
Milan
Rome
0 200 400 600 800 1000 1200 1400
0 200 400 600 800 1000 1200 1400
LimaSeoul
BudapestBarcelona
Kuala LumpurPrague
WarsawBrusselsMadrid
VancouverSt. Petersburg
BogotaMelbourne
RomeIstanbul
FrankfurtSan Francisco
MumbaiMilanDubai
OsloStockholmSao Paulo
SydneySingaporeNew Delhi
BeijingShanghai
ParisZurich
Rio de JaneiroMoscow
TokyoHong Kong
London west end
ITALY REAL-INVEST18
Rental Variation Rate - Prime Global locations % 1st / 2nd semester 2013 Source: World Capital
Milan
Rome
-10% -5% 0% 5% 10%
-10% -5% 0% 5% 10%
St. PetersburgSao PauloParisBarcelonaBeijingSydneySeoulWarsawRio de JaneiroBudapestKuala LumpurMadridVancouverRomeOsloNew DelhiZurichHong KongBrusselsMoscowMilanStockholmMumbaiIstanbulPragueSingaporeLondon west endTokyoFrankfurtMelbourneLimaShanghaiSan FranciscoDubaiBogota
ITALY REAL-INVEST 19
Vacancy Rate- Prime Global locations % II semester 2013 Source: World Capital
0 5 10 15 20 25 30 35
LimaVancouverBogotaHong KongTokyoRio di JaneiroRomeZurichShanghaiParisOsloLondon West EndBeijingSingaporeMelbourneSeoulIstanbulSydneyMadridWarsawSan FranciscoStockholmMilanSao PauloSt. PetersburgBrussellesMoscowFrankfurtPragueMumbaiBarcelonaNew DehliKuala LumpurBudapestDubai
Rome
Milan
ITALY REAL-INVEST20
150100500
200250300350400450500
Main Italian O�ce Markets Annual Rent€/sq m pa II semester 2013 Source: World Capital
Annual Yield% II semester 2013Source: World Capital
45,4%Office Markert
Other Markerts
54,6%In the second semester of 2013, more than 45% of total investments in Italian real estate market is regis-tered for o�ce sector which shows its appetability of this sector for investors.
Investments in the O�ce Sector - ItalySource: Bank of Italy
City
Cen
ter -
CBD
City
Cen
ter
City
Perip
hery
CBD
(Eur
)
City
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
Perip
hery
City
Cen
ter -
CBD
City
Cen
ter
City
Perip
hery
CBD
(Eur
)
City
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
City
Cen
ter
Perip
hery
Perip
hery
Milan Torino Padua Bologna Rome Florence Naples
5,5
5,0
6,0
6,5
7,0
7,5
8,0
8,5
Milan Torino Padua Bologna Rome Florence Naples
ITALY REAL-INVEST 21
ITALY REAL-INVEST
Retail Sector
22
Italy is the home of fashion, design, art, food and etc... regarding to the importance of "Made in Italy" each retail brand for establishing itself in the world needs to have its roots also in Italy; Strong Domestic consumption is accompanied by a structured and consistent external demand generated by tourism �ows; Increasing attractiveness of commercial structures known as outlets and shopping malls; In Italy every city and town has its own High street, which is characterized by having vacancy rates equal to zero; know a days In many Italian High Streets demand does not meet the request which makes it even more desirable.
Why invest in Italian hospitality sector?
High StreetsRetail ParksCommercial CentersOutlets
ITALY REAL-INVEST
Types of Retail spaces in Italy
23
Nowadays there are four main commercial property categories in Italy: outlets, malls, high streets and shop-ping centres, that is to say clusters of large retail establishments, each with their independent entrance and visible brand identity . Outlets are already evenly distributed across the Italian territory although there still is potential for new outlet developments in certain areas.
Because of the availability and bargain prices of designer clothes and accessories to be found in outlets, these establishments �gure among the most popular spots for domestic and international tourists. Malls have reached their full potential and can guarantee investors constant ROIs.
Regarding shopping centres, the increasing presence of food courts contributes to attracting large numbers of visitors. These di�erent commercial real estate typologies represent interesting investment opportunities for all kinds of investors. In conclusion, the above mentioned high streets enjoy good maintenance and are constantly involved in interventions of commercial as well as structural improvement.
ITALY REAL-INVEST
Italian high streets
Every Italian town has at least a shopping street. This statement is built on the assump-tion that retail activities are everywhere to be found in Italy. For instance, they abound in the historical centers of main cities and towns as well as in the well-known bucolic villages that dot the peninsula’s countryside and holiday destinations. The architectural legacy of traditional high streets extends its stylistic in�uence to modern shopping meccas such as malls and outlets. It is indeed no coincidence that these new retail spaces boast features that are typical of the traditional architecture found in city centers. While numerous newly built malls and outlets copy the style of traditional high streets, the latter are something irreplaceable that devel-oped over time and that is therefore available in limited supply. This acknowledgement is helpful in under-standing why property in such locations retain high values and yields, keeping investment risks at bay.
24
ITALY REAL-INVEST
Annual Rent - Worldwide High Streets €/sq m paII semester 2013 Source: World Capital
CITTÀ HIGH-STREET
310
1145
1700
1730
2040
2100
2170
2210
2350
2400
2460
2480
2660
3360
3700
3840
3960
3950
4100
4800
4930
5430
6100
6390
6700
7400
8100
10150
13400
21340
22050
22320
0 5000 10000 15000 20000 25000
Sheikh Zayed Road
Linking Road
Garcia d`Avila
Rue Neuve
Na Příkopě
Myeongdong
Grafton Street
Khan Market
Kalverstraat
Karl Johan Gate
Baghdat
Puerta del Sol Preciados
Nevskij Prtospekt
Spitalerstraße
Wangfujing
Zeil
Tauentzienstraße
Nanjing Road West
Kaufingerstraße
Goldene U
Rue du Rhone
Ginza (Chuo Street )
Tverskaya
Via Condotti
Via Montenapoleone
Pitt Street Mall
Bahnhofstrasse
Avenue des Champs-Elysées
Oxford Street - West
Russell street
Fifth Avenue
Causeway BayHong Kong
New York
Hong Kong
London
Paris
Zurich
Sydney
Milan
Rome
Moscow
Tokyo
Geneva
Vienna
Munich
Shanghai
Berlin
Frankfurt
Beijing
Hamburg
Saint Petersburg
Madrid
Istanbul
Oslo
Amsterdam
Delhi
Dublin
Seoul
Prague
Brussels
Rio de Janeiro
Mumbai
Dubai
25
The major part of the retail supply in Italy is concentrated in Northern part of the country with 41.1% of the whole retail supply. This percentage includes cities such as Milan, Turin, Genoa, Venice, Cortina and Verona. High-streets in these cities are also ranked as the top lease prices, national wide.You can find their ranking in the graphic demonstrated on the next page together with other high-streets in center and south of Italy.
ITALY REAL-INVEST
Islands 10.8%
South 23.1%
Center 25%
North West 24.80%
North East 16.3%
North 41.1%
Prime Retail Markets - ItalySource: World Capital
Retail Property Supply- Italian Market%2013 Source: The National Institute for Statistics (ISTAT) - Bank Of Italy
Milan Cortina
VeniceVerona
Florence
Rome
Naples
Bari
Palermo
Porto Cervo
Bologna
Turin
26
ITALY REAL-INVEST
Annual Rent - Italian High-Streets €/sq m paII semester 2013 Source: World Capital
0 1000 2000 3000 4000 5000 6000 7000
MilanoRomaRomaMilanoRomaMilanoVeneziaVeneziaMilanoVeneziaFirenzeVeronaFirenzeVeronaCortinaRomaFirenzePortofinoMilanoFirenzeFirenzeRomaPorto CervoVeronaPortofinoFirenzeTorinoTorinoVeneziaRomaTorinoPorto CervoPalermoBolognaBariPalermoMilano
Via Monte Napoleone Via Dei CondottiVia Del CorsoVia Della SpigaPiazza Di SpagnaCorso Vittorio EmanuelePiazza San MarcoVia MerceriaVia DanteVia Xxii MarzoVia CalzaiuoliVia MazziniVia RomaVia CappelloCorso ItaliaVia Del BabuinoVia StrozziPiazza Martiri Dell'olivettaVia TorinoVia TornabuoniPiazza Degli AntinoriVia BorgognonaPiazzettaCorso Porta BorsariVia Calata MarconiVia CalimalaVia RomaVia La GrangeVia FrezzeriaVia Cola Di RienzoP. San CarloVia La PasseggiataVia LibertàGalleria CavourVia SparanoVia Ruggero SettimoCorso Buenos Aires
High-StreetCity
27
ITALY REAL-INVEST
3,000
5,000
6,000
7,000
8,000
9,000
I SEM2011
II SEM2011
I SEM2012
II SEM2012
I SEM2013
II SEM2013
Milan and Rome’s high streets are without doubt some of the most renowned worldwide. Milan reaches the 8th and Rome the 11th place in the world ranking of commercial property rent prices. Via Montenapoleone in Milan and Via Condotti in Rome have transcended the mere street status to become actual ‘brands’ that enhance the shops and the buildings located there. It is therefore clear to see why properties in such sought-after locations guaran-tee some of the world’s most constant and stable revenues.Italian property values are some of the world’s highest. This is due to a combination of high occupancy rates and historical and architectural prestige characterizing many buildings in city centers. Even in these unstable times, Italian high street revenues have maintained their competi-tive edge. Investing in such areas has therefore become a must for international operators.
Yiled- Milan and Rome%2013 Source: World Capital
28
ITALY REAL-INVEST 29
ITALY REAL-INVEST
8,20
- 8,00
-26,00
-27
-24,00
-8
-18,1
48,50
26
44,30
50,70
76,23
59,70
49,8
83,51
91,40
108,20
99,00
110,54
104,00
113,00
114,30
121,00
-12,00
-11,00
-7,00
-5,00
- 4,00
-1,00
2,70
8,20
17,00
40,50
71,00
72,36
81,20
84,60
85,81
98,00
102,30
105,00
107,62
109,00
110,00
113,90
115,00
-30,00 -10,00 10,00 30,00 50,00 70,00 90,00 110,00 130,00
India
Brazil
United Arab Emirates
South Korea
Australia
Hong kong
China
Italy
France
Irland
United States
Turkey
Spain
Japan
Norway
Germany
Switzerland
Austria
Belgium
Czech Republic
United Kingdom
Russia
Netherlands
Consumer con�dence I semester 2013 - II semester 2013 Source: ISAE - ISTAT (Italian National Institute of Statistics)
30
ITALY REAL-INVEST
Consumer Expenditure
Consumer Con�dence
202000
202500
203000
203500
214000
204500
Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 2015
85
90
95
100
105
115
110
Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 2015
Consumption Trends - Italy€II semester 2013 Source: ISTAT (Italian National Institute of Statistics)
After two years strongly affected by the economic crisis, in this new edition was intended to pay particular attention to initiatives and guidelines that Italian families are developing in order to achieve a new balance in managing their budget a spending.Certainly these could still be accounted, for good measures, as the negative signs characterizing what happened in the last period, but it is equally true that the most acute phase of the crisis is exceeded and now Italians tend to deal with an unprecedented scenario, a scenario which tests different methods and opportunities. especially those that were previously not been taken into account or seemed less necessary.In 2015, two to the international event of EXPO, it has been seen a big boom in consumer confidence and as a Conse-quence in consumer expenditure. this event will be attended by more than 120 countries, Which will drive a huge amount of tourist flow in Italy and especially in Milan.
31
Industrial Sector
Italy by its very geographical nature is a strategic hub for the distribution of goods in Europe and its basin;
construction of new infrastructures thanks to the policies will make Italy even more strate-gic for the distribution of goods;
change in the Italian socio-economic structure has led to a new and growing demand for logistics;
logistics real estate products in Italy are designed with the same logic of traditional build-ing products to last for a long period of time while keeping �exibility in design;
quality of real estate Product, strategic position and domestic and foreign demand (import and export) make Italian logistics real estate very attractive from a revenue point of view;
Why invest in Italian Industrial sector?
ITALY REAL-INVEST32
The nature of manufacturing practices has always influenced logistics in Italy. Traditionally, manufactur-ers have always produced and taken charge of the delivery of their goods. It was only in the past 20 years that we have started to see logistics outsourcing. This new trend generated a climb in the demand of logistic property, which is now an important sub sector of real estate. Policy changes, together with the relocation of many manufacturing plants abroad, have created the necessity of efficient logistic services, with the consequent flourishing of the logistics real estate sector. There are four main strategic settings in logistics: harbours, ports, freight villages and logistic hubs. Geographically speaking, Italy is Europe’s ideal gateway to the Mediterranean Sea. For this reason Italian commercial harbours can become a development/investment priority for the main global shipping companies.
Types of industrial and logistic spaces in ItalyProduction plantsLogistic
Ports / AirportsFreight villageslogistic hubsLogistic location
ITALY REAL-INVEST 33
< 15,000
15,000 - 50,000
50,000 - 100,000
100,000 - 250,000
250,000 - 1,000,000
1,000,000 <
European 3PL Warehouse Mapm2 Warehouse Capacity Listed2013 Source: World Capital elaboration on data from Eye For Transport
ITALY REAL-INVEST34
Il fenomeno di ripresa dalla crisi globale di cui ultimamente sentiamo parlare, lo si può ritrovare nei dati ottenuti riguardanti le principali capitali europee della logistica che hanno risentito di una stabilizzazione e, in alcuni casi leggero aumento dei valori. Nonostante la logistica sia strettamente legata ai numeri dell’attività produttiva e più in generale all’andamento del mercato, risulta un settore che ha retto meglio di altri agli avvenimenti di questi ultimi mesi.
Il mercato italiano, senza però evidenziare situazioni di vera e propria recessione, presenta una generale riduzione dei prezzi medi di locazione. Il mercato a Milano (50 €/mq anno) e a Roma (48 €/mq anno) rimane stabile, sebbene gli affari continuino a crescere a ritmi rallentati.
€ 20,00 40,00 60,00 80,00 100,00 120,00 140,00 160,00
OsloZurichLondonMoscowStockholmSt. PetersburgAmsterdamMonacoTel AvivParisFrankfurtGlasgowBarcelonaIstanbulManchesterDublinMadridKievRotterdamBerlinWarsawViennalineAthensBrusselesMilanRomePragueBucharest
Lease Trends - Europe Prime Logistic Locations €/m2 pa
II semester 2013 Source: World Capital
ITALY REAL-INVEST 35
DYNAMIC
MODERATE
STABLE
STAGNANT
Rivalta ScriviaGenova
Torino
NovaraMilan
Bergamo
Verona
Trento
PadovaVenezia
Rovigo
Udine
Bologna
RiminiPrato
Firenze
Perugia
PescaraCivitavecchia
Rome
CasertaNola
PotenzaNaples
Bari
Cagliari
Olbia
Sassari
Gioia Tauro
Lecce
CataniaPalermo
Livorno
ParmaPiacenza
Market Dynamics - Italian Prime Logistic Locations Source: World Capital
ITALY REAL-INVEST36
25 30 35 40 45 50 55 60 65MIN MAX Location
NOVARATORINOMILANO
PIACENZAPADOVAVERONAPARMA
BOLOGNAGENOVA
RIMINIBERGAMO
TRENTOVENEZIA
UDINELIVORNO
RIVALTA SCRIVIAROVIGO
FIRENZE
PERUGIA
PESCARA
ROMA
CIVITAVECCHIA
PRATO
BARI
NAPOLI
CATANIA
NOLA
CASERTA
POTENZA
GIOIA TAURO
SASSARI
OLBIA
CAGLIARI
LECCE
PALERMO
35 4136 4643 5332 4042 5238 4638 4240 5053 6338 4638 4840 5044 5640 4641 5037 4636 41
50 60
38 45
36 43
40 51
37 50
45 53
32 40
38 45
37 46
39 47
35 45
39 47
36 45
37 48
42 48
42 50
36 46
36 44
Lease Ranges - Italian Prime Logistic Locations €/m2 pa
II semester 2013 Source: World Capital
ITALY REAL-INVEST 37
Nowadays the Italian commercial harbour network still lags behind the main North European ports. In terms of real estate, this is a positive situation that offers ripe opportunities for invest-ment. In the same fashion, airports are also attracting investments, such as those involved in the development of the cargo area of Milan Malpensa airport in view of EXPO 2015.
On the other hand, freight villages are a typically Italian phenomenon. Established by orders of the government, these logistic platforms base their strength on the links between various modes of transport. One of the most valuable links is that between road and railway, a combination that has considerably contributed to shaping the country’s infrastructure policies in the last 30 years.
Nowadays freight villages generate interesting ROIs while keeping the risk ratio low. Last but not least, logistic hubs are structures located alongside the main transportation routes but in differ-ent areas from those already mentioned here. They are mostly characterized by mono-tenancy and share with freight villages a strong investment appeal.
Vado Ligure
Rivalta Scrivia
Orbassano
Novara
Mortara
Verona
Trento
Padova
Venezia
Rovigo
Cervignano
Portogruaro
Bologna
PratoLesi
Pescara
Frosinone
Civitavecchia
Marcianise
NolaBari
Taranto
Cagliari
Olbia
Gioa Tauro
Brindisi
Catania
Livorno
Parma
SITo di Torino
CePIM - Interporto di Parma
Interporto della Toscana Centrale
Interporto di Rivalta Scrivia
Interporto di Civitavecchia
Interporto Sud Europa
CIM Novara
Interporto Amerigo Vespucci
Polo Logistico di Mortara
Interporto Quadrante Europa
Interporto di Trento
Interporto di Padova
Interporto di Cervignano del Friuli
Portogruaro Interporto
Interporto di Venezia
Interporto di Rovigo
Interporto di Bologna
Interporto delle Marche
Interporto d’Abruzzo
Interporto Campano
Interporto Regionale della Puglia
Interporto di Vado
Italian Publicly Subsidised Freight Villages2013 Source: World Capital elaboration on data from Unione Interporti riuniti (UIR)
ITALY REAL-INVEST38
Lease Ranges - Italian Publicly Subsidised Freight Villages€/m2 pa
II semester 2013 Source: World Capital
MIN MAX
Interporto Quadrante Europa 41 48
Interporto di Trento 40 50
Interporto Padova 39 53
Interporto di Rovigo 36 41
Interporto di Bologna 42 50
Interporto delle Marche 38 42
Interporto d’Abruzzo 40 46
Interporto Campano 50 80
CePIM Interporto Di Parma 38 40
CIM Novara 35 41
SITo Torino 38 48
Interporto Amerigo Vespucci 54 60
Interporto della Toscana Centrale 56 60
Interporto Di Rivalta Scrivia 39 45
Interporto Di Vado Ligure 50 63
48 55Interporto Sud Europa
Verona
Trento
Padova
Rovigo
Bologna
Lesi
Pescara
Nola
Parma
Novara
Torino
Livorno
Prato
Rivalta Scrivia
Vado Ligure
Marcianise
Lease €/sq m/yearFreight VillageCity
Bologna Interport
ITALY REAL-INVEST 39
ITALY REAL-INVEST40
Italy is one of the World’s prime tourist destinations and it ranks at number 1 among tourists from emerging economies.
Tourist as well as business travel �ows do not cease to increase, and so does the RevPAR (Revenue Per Available Room).
The presence of international, management-focused hotel companies in Italy is increasing.
Hotel properties are often prestigious and well-kept historical buildings.
The current economic situation has contributed to a very favourable investment/revenue ratio and competitive GOP (Gross Operating Pro�t) performances.
Why invest in Italian Hospitality sector?
Hospitality typologies in ItalyHotelsAgritourismLeisure (Golf Clubs - Stadiums)
ITALY REAL-INVEST 41
Italy is a historically renowned tourist destination. Nowadays the tourist industry is crucial to the country’s GDP and all political and civil institutions agree on one thing: tourism has to be treated as one of the nation’s development priorities so that it can become a full-�edged economy booster. This implies great, high quality opportunities in real estate investment. The Italian hotel sector is indeed facing a major shift in its way of operating, especially considering the way it is moving from a family-run to a complete corporate-like management attitude. Such changes are leading to common business goals and di�erent methods. This also implies a general revision of the structures that are suitable for hospitality purposes. The productive, operational, and functional specialization that characterizes recent developments in business practices, is also a�ecting the hotel sector. In the last decades Italian hospitality sector is becoming more and more specialized not only in Hotel sector but also in new realities such as B&Bs and agritourisms. For instance, the leisure sector is attracting more and more investors who aim to develop new wellness hotels including spaces such as golf clubs and stadiums . The Italian government is also working on new policies that will transform sport stadiums into multifunctional leisure locations where visitors will be able to enjoy themselves.The transition from a family-based to a business-oriented management paradigm has had remarkable consequences in the hotel business environment. Establishments rating 3 stars or lower have become less and less common, whereas 4 and 5 star hotels have increased their presence. This phenomenon can be ascribed to the growing degree of specialization that is currently pervading all business sectors.
0 100.000 200.000 300.000 400.000
LuxembourgLithuaniaLatviaEstoniaMaltaSloveniaSlovakiaCyprusRomaniaBulgariaHungaryFinlandDenmarkIrelandBelgiumczech republicPortugalSwedenPolandGreeceNetherlandsAustriaUnited KingdomGermanyItalySpainFrance2,3
6,93,04,2
-1,61,30,6
n.d.2,41,14,03,63,6
n.d.3,93,82,1
15,612,0
3,51,75,21,6
14,916,217,0n.d.
Var. % 12/10
Tourists Presence In Hospitality Facilities- Europe2012 Source: Eurostat - ISTAT
Genoa bay (Liguria, Italy)
ITALY REAL-INVEST42
Hotel Supply and Occupancy Rates - Europe2012 Source : Eurostat - ISTAT
Country Hotels% on tot.UE
% on tot.UE
% on tot.Occupancy
Beds(thousand)
Beds occupied(thousand)tot. UE
Belgium
Bulgaria
Czech Republic
Denmark
Germany
Estonia
Ireland
Greece
Spain
France
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
United State
European Union
ITALY REAL-INVEST 43
90,0
95,0
100,0
105,0
110,0
115,0
120,0
125,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Italians International Total
2001 1,6 3,2 2,3
2010 -0,2 4,4 1,8 2011 0,3 7,6 3,5
Italians
International
Total
- By Tourist NationalityIndex Number 2000=1002011 Source: ISTAT
- By Hospitality Sector2012Source: ISTAT
Tourist Arrivals By Location Nights Spent By Location
34%
23%
12%
11%
5%3%
12%
46%
17%
9%
8%
4%3%
13%
Art cities
Seaside resorts
Lakeside resorts
Mountain resorts
Countryside resorts
Thermal spas
Other
0
100
200
300
400
500
600
700
Arrivals Bed Night Forecast
Arrival(thousand) (thousand)
Bed Night AVG Bed night
1953 17.219 49.456 2,9
2000 66.760 233.613 3,5
2011 83.056 259.911 3,1
2012 83.200 260.354 3,1
Hotel Demand Dynamics - Italy- By Tourist Arrival and PresenceIndex Number 1953=1002012 Source: ISTAT and Federalberghi
1953 1960 1970 1980 1990 2000 2011 2012 2015
ITALY REAL-INVEST44
* Because of roundings total values may differ from the sum of single values.** Tourist residence-hotel (Residenze turistico-alberghiere)
CategoriesArrivals*
(Thousand)Var. % 12/00
Bed night* (migliaia)
Var. % 12/00
AVG bed night2012 2000
% non-italians bed night2012 2000
Hotel Demand Dynamics - Italy- By Hotel Category2000 - 2012 Source: ISTAT
Tourist residence-hotel is kind of hospitality facility that is provided with accommodation in at least 7 rooms or apartments with or without kitchen facilities and other extras, including bar and restaurant services.
ITALY REAL-INVEST 45
0,0
100,0
200,0
300,0
400,0
500,0
600,0
700,0
1950 1960 1970 1980 1990 2000 2011 2012
Esercizi
Camere
Letti
Hotel Rooms Beds
1950 20.074 215.986 365.470
2012 33.728 1.295.916 2.202.820
Hotel Supply Dynamics - ItalyIndex Number 1950=1002012 Source: World Capital elaboration on data from ISTAT and Federalberghi
Hotel Supply - ItalyBy category2012 Source: World Capital elaboration on data from ISTAT
33.728TOTAL +1%
393
5.354
18.034
6.509
3.438
+140%
+76%
+19%
-26%
-44%1 Stars Hotels
2 Stars Hotels
3 Stars Hotels
4 Stars Hotels
5 Stars Hotels
Category Number Of Hotels Variation In % 2002/2012
ITALY REAL-INVEST46
Venice € 196,00 € 196,00 0%
Milan € 145,00 € 151,00 -4%
Florence € 135,00 € 134,00 1%
Rome € 130,00 € 135,00 -4%
Verona € 123,00 € 124,00 -1%
Bologna € 103,00 € 106,00 -3%
turin € 101,00 € 104,00 -3%
Bari € 99,00 € 103,00 -4%
Naples € 89,00 € 93,00 -4%
Palermo € 84,00 € 89,00 -6%
10 most expensive Average return 2013 Average return 2012 Variation 2012-2013
Hotel Revenues - ItalyTop 10 Locations by hotel revenue/night and Tourism �ows2012 Source: World Capital elaboration on data from Istat
Colosseum (Rome, Italy)
ITALY REAL-INVEST 47
Hotel Revenues - ItalyTop 10 locations by hotel revenue/night2013 Source: TRIVAGO
10 most expensive Average revenue/night
Forte dei Marmi € 203,00
Cortina d'Ampezzo € 199,00
Venice € 196,00
Santa Margherita Ligure € 179,00
Capiri € 178,00
Positano € 178,00
Madonna di Campiglio € 177,00
Merano € 171,00
Taormina € 170,00
Amalfi € 166,00
Tourism Flows - ItalyTop 10 Cities Values in thousand2007-2012Source: National observatory of tourism (ONT)
City 2007 2008 2009 2010 2011 2012
Rome 8554 8324 8145 8464 8723 8423 -1,5 -3,4
Milan 5217 5147 4969 5125 5901 5770 10,6 -2,2
Venice 4577 4419 4394 4402 4920 5024 9,8 2,1
Florence 3911 3690 3582 3521 3959 4104 4,9 3,7
Verona 1408 1345 1378 1405 1458 1779 26,4 22,0
turin 1249 1279 1175 1330 1322 1457 16,7 10,2
Bologna 1009 1101 1115 1346 1356 1262 25,0 -7,0
Naples 1165 1103 1285 1282 1051 1134 -2,7 7,8
Padua 651 573 638 652 713 918 40,8 28,7
Como 550 647 757 578 723 750 36,3 3,7
Variation %2012/2007
Variation %2012/2011
ITALY REAL-INVEST48
ITALY REAL-INVEST 49
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