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Italian Real Estate Perspective 2021
Contents
01
Setting the scene 04
07
Retail --
02
Italian real estate market 2020 12
08
Hospitality --
03 09
Milan, a successful brand in 16 Living & alternatives --
an ever-changing city
04
APPENDIX: Italian macro-economic
overview & outlook
Rome goes bis 24
05
Office 30
06
Logistics 42
2 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 3
01
Setting the scene In 2020, global commercial real
estate investment volumes totalled
$762 bln, falling of 28% from record
mainly ascribable to the hotel and
office sectors; logistics, residential,
alternatives and healthcare are
propulsion vehicles, the production
and distribution of hydrogen,
digitalisation, broadband and 5G
activity in 2019. Global capital gaining a growing share of the communication networks will be
markets continued to recover from market. at the core of the selected projects.
General Outlook the sharp contraction experienced The task is to define goals for 2026,
earlier in the year during the final Record-low interest rates and final year of the Next Generation
In 2020 the global economy suffered will be released, propelling the down in investment and export quarters. Strong performance during government intervention continue EU, and, more in the long-term, for
what will likely constitute its worst recovery. Until that juncture, components. The positive effects the fourth quarter moderated the to support debt markets globally, 2030 and 2050, the year in which the
calendar-year performance during the economy remains beset by of the strong rebound in Q3 full-year decline. After months of with indication from the FED and EU aims to achieve net-zero carbon
the modern era of economics, massive uncertainty surrounding were held back by the restriction uncertainty, transaction pipelines ECB more recently that rates will emissions. In the past, uncertainty
contracting by nearly 4%, far the pandemic. With the outbreak measures in the last quarter of the are rebuilding globally, although remain lower for longer. These about taxes and rules and public
exceeding 1.4% contraction during reaching record levels, the race has year. The new measures slowed investors remain cautious with factors are creating stability in investment plans has limited
the Global Financial Crisis. The begun to vaccinate a wide enough down household consumption many preferring to deploy capital in real estate in the early stages of investments, both Italian and
pandemic left virtually no corner of swath of the population trying to and the service sector. The defensive, income-oriented assets. a recovery. Debt-pricing for high- international. The Next Generation
the global economy unscathed and keep the virus under control and recovery of the Italian GDP is The heightened focus on resilient quality assets is now back to EU foresees reforms on these
produced simultaneous supply- enable the economy to recover. But postponed; a real recovery could supply-demand fundamentals and pre-Covid levels for most asset aspects, as well as on transparency
side impacts (due to measures the exact path between now and only occur from mid-2021 if income stability has triggered a shift sectors; this will support refinancing and competition.
such as shutdowns and lockdowns) then is still highly unpredictable. vaccinations will bring down the toward demographically-driven activities and the increase in
and demand-side impacts (due to The short-term outlook contains health emergency and restart sectors. Leading beneficiaries have investment volumes. Lenders are In February 2020, Covid-19
people avoiding activities). This sets more uncertainty than the longer- consumption. In early 2021, the been the logistics, multifamily still conservative and continue to spread throughout the entire
the stage for a potential bounce term outlook. worsening of confidence pushes and select alternative sectors. place greater scrutiny on leverage, World. A few days later, lockdown
back in 2021. The economy looks household to increase savings; As for the office sector, capital loan size, sector, asset profile and and social distancing measures
poised to attain growth of near After a deceleration in 2019, the in addition, due to Covid-19 remain active in select segments cash flows. drastically changed today’s life.
5% this year. Once a large share Italian economy recorded a deep regulations, consumers postpone of the market: core products with Covid-19 pandemic has proven to
downturn in GDP in 2020 (-8.9% creditworthy tenancies and long-let The allocation of Recovery be an accelerator of change and
of the global economy becomes purchases.
YoY), mainly due to a slowing income continue to be attractive Plan capitals will be crucial transformation for the whole real
immunised, pent-up demand
opportunities for investors. Major for the recovery of the Italian estate sector that will last well
global investors continue to be a key economy affected by a high and behind the sanitary crisis. Five long-
source of liquidity in the markets growing public debt. Focusing term trends are affecting the real
however, many investors are on digitalisation, infrastructures, estate market and the responses
pivoting to domestic and regional sustainability, tourism and research to these will shape the future not
markets. this will be a unique opportunity only of the entire industry but even
for our RE market. Production of that of our communities, cities and
In Italy, 2020 recorded 141 energy from renewable sources, society.
investment deals for a total of air and water pollution, the high-
around €8.3 billion, lower by 33% speed railway network, energy
than 2019. The slowdown was distribution networks for electric
4 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 5
1. Allocations to real estate stable and expected to increase 2. Growth in corporate outsourcing
Uncertainties related to COVID-19 The low interest rate environment Investors are increasingly favoring Because of the heath crisis, we are 1. Corporate real estate teams are 3. Changes are continuously taking
have not slowed down global and financial asset price volatility locations and sectors that are assisting to an acceleration of the looking to become thinner, more place in regulatory, contractual
institutions’ confidence in will support the case for portfolio resilient to economic or geopolitical outsourcing trend. This will last agile and strategic. With the right and behavioral compliance
commercial real estate. For diversification. ”Flight to safety” disruption and cities that offer over the long term. Occupiers will external partner, a company requirements across the globe.
investors, real estate is no longer in real estate, which continue a diverse range of talent and increasingly seek third-party real can upskill its internal team and Your strategic partner will need
an alternative asset. It's now a core to offer better relative returns in innovation. Besides the established estate services to sustain business rely on its outsourced provider to be constantly on top of the
asset class. The amount of dry comparison to other asset classes, locations, high-growth midsized continuity. There will be increased for day-to-day operations. The regulatory changes and best
powder in closed-end funds is at looks set to increase. Real estate cities are attracting companies and demand for new workplace design, increased productivity, pricing practices to be able to effectively
near-record levels totalling US$336 market also shows low correlation investors as a means of mitigating including more digital, flexible and leverage and access to resources advise the business.
bln at the close of 2020; volumes of investment returns to other risk, spotting future resilience and health-oriented working solutions. that a partner is able to bring,
shrank 8% YoY but are still well asset allocations. Some sectors, exploring alternative asset classes. This will consist in a strategic can make the company’s 4. The way data is captured and
above the five-year average; the like residential and logistics, have partnership, with service providers portfolio more effective and its reported around occupancy
amount targeting the European real favorable operating fundamentals using sophisticated technologies to performances more predictable. utilisation, service requests,
estate is at US$86 (January 2021). in terms of supply and demand. streamline and standardise the way equipment faults or actual
properties are managed and drive 2. Companies recognise that they energy consumption plays a
positive business results. Reducing will achieve better results by fundamental role in effective
Dry Powder Targeting European Real Estate costs is still a large factor, but also focusing on core competencies
and bringing in strong strategic
decision-making and related
business performance.
employee well-being, satisfaction
(US$ billions) and productivity, as well as real- partners to provide noncore
time decision-making support are services to their business.
part of the equation.
120
100
80
60
40
20
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Jan-21
Core Value Added Opportunistic Core-Plus Debt Distressed Other
Source: Preqin, January 2021
6 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 7
3. Urban regeneration and cities 4. Technology
Cities are growing faster than age for the continent increasing is unlikely to slow the long-term Technological advances are blurring even more sophisticated can automate building processes.
ever: more than half the global to 45.1 years-old. Changes in trend in growing urbanisation, the lines between physical, digital capabilities. Today’s PropTech is AI and big data can provide
population live in cities now, and demographics have numerous but will prompt a rethink in urban and biological spheres. The mass incorporating: Artificial intelligence insight into a property’s operating
by 2050 another 2.4 billion people effects such as on economic design, increasing the imperative adoption of remote-working (AI), Big data and analytics, Virtual efficiency, financial performance
will join them. By 30 years, more growth, patterns of consumption to develop truly scalable smart city technology through the pandemic reality (VR) and augmented reality and more. By developing and
than two-third of the world will and labour market. solutions, to put a much greater phase will likely increase the pace (AR), Computer aided design (CAD). implementing smarter, data-driven
live in urban areas. In Italy, 7 out focus on public health and safety, of the Fourth Industrial Revolution, solutions, investors can make more
of 10 people will live in an urban People will continue to move and to deliver greater investments including even more emphasis on With PropTech comes the informed decisions.
area. In the next 10 years, all to the main cities looking for in public infrastructure. robotics and unmanned vehicles. opportunity for a potentially
European countries will have an opportunities for work, study faster, more insightful transaction Technology will continue to
ageing population with an average and socialisation. The pandemic Property technology, or PropTech, process. Tools like VR and AR, change the way we experience
refers to the innovation and drone technology and CAD now buildings, but it will also play a
origination poised to disrupt give potential buyers, investors fundamental role in making our
the way commercial real estate and tenants the ability to truly cities more livable, sustainable and
processes are done. While PropTech visualise a space without ever competitive.
is not a new-to-the-industry stepping foot inside of it. Big data
concept, a new wave has presented is closely associated with AI, which
Continuing growth in the world’s population but at a deceleration rate.
Population by 2050:
World +2bln (+26%)
Europe +21m (+2%)
Italy -4m (-7%)
A strong concentration in population Population ageing in every country with the
growth in cities and in a small number median age of the world’s population rising
of countries. to 33 years in 2030.
Urban population by 2050 (% on total): Population over 64 by 2050 (% on total):
World 70% (2019 56%) World 16% (2019 9%)
Europe 77% (2019 72%) Europe 25% (2019 17%)
Italy 73% (2019 69%) Italy 34% (2019 23%)
5. Sustainability & rating schemes
Sustainability is rapidly moving up how real estate can shape a more demand for green assets, including
political and business agendas. robust, innovative and inclusive net zero carbon buildings as major
GDP growth: Employment growth:
Europe +1,8% / Italy 1% Europe +0.1% / Italy -0.1% Sustainability is becoming a economy and society, in terms companies and customers make
Main cities: 100 European cities +2% Main cities: 100 European cities +0.6% mainstream issue within the of transformative developments, commitments on carbon emissions.
/ 8 Italian cities +1.1% / 8 Italian cities +0.1%
(Annual growth 2021- 2035) (Annual growth 2021- 2035) real estate sector. There will enhancing transparency and The number of ‘green’ energy-
be an increased spotlight on leveraging technology. efficient buildings worldwide is
corporate social responsibility, and increasing rapidly, and there is a
through this, greater awareness Sustainability raises huge clear economic imperative – green
of the fragility of our society and challenges in terms of buildings are out-performing and
Source: JLL on Oxford Economics data decarbonised assets and will climate change is starting to impact
ecosystem. Real estate contribution
to ‘city resilience’ can be looked drive big changes in the design negatively on values and insurance
from several perspectives: from and specification of buildings. premiums.
the specifics of creating resilient, Over the next 5 to 10 years and
healthy and sustainable buildings to beyond, we anticipate growing
8 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 9
Over time the sustainability agenda that companies are facing in element of resilience – buildings
has broadened to embrace not just attracting and retaining talents. will need metrics that track not
environmental issues but other only light and noise, but building
social and governance factors The COVID-19 pandemic is leading ventilation, air filtration and
(ESG factors). In this context there to elevated awareness of personal cleaning. Health concerns could
is an emerging interest among and environmental hygiene, force the redesign of buildings
some developers and investors in health, work-life balance and social and places so that social
developing buildings that provide relations. Building owners and distancing can be turned on or
enhanced characteristics and operators will need to adjust to off without significant disruption
amenities which address worker keep workers and building users – through use of innovative
wellbeing. This interest largely safe and healthy. ‘Building health’ space design and smart building
reflects the increasing challenges will become a far more important technologies.
In the short-term, rating schemes will
be related not only to environmental
protocols but even more to wellbeing,
digital and technology.
Milan Rome
320 green buildings of which: 90 green buildings of which:
143 LEED 57 LEED
65 BREEAM 9 BREEAM
1 GBC Quartieri 1 GBC Historic Building
12 Well 1 Well
19 Wired Score 1 Wired Score
504 NZEB (Lombardia, 2018) n.a. NZEB
> 10,000 certifications released
in Italy
Source: GBC Italia, ENEA, CasaClima
10 | Italian Real Estate Perspective 2021
02
Italian Real Estate
Market 2020
Due to the effects of the pandemic, the 2020 Italian commercial real estate
market recorded a slowdown in terms of investment volume; logistics, residential,
alternatives and healthcare are gaining a growing share of the market while Milan
confirms its attractiveness.
With a total volume of €8.3 Italian investors’ volume remained sectors. Following an exceptional
billion, Italy ranks 13th among the stable at €3 bn and in line with the 2019, hospitality resulted to be
leading markets for investment in last 5-years’ average, confirming one of the most affected sector, Italy, Source of capitals 2020 (percentage weight and absolute value)
commercial real estate, confirming a the confidence of institutional due to travel restrictions and
strong interest in the Italian market. investors towards the sector but government-mandated lockdowns
After the record level of 2019, the also its limitation. The key players that induced a dramatic decline in
market recorded a significant in the market comprise capital from hotel occupancies across the world.
contraction. Volumes are lower Germany, France and USA. Investor Although the contraction, the office
compared to 2019 (-33%) and to strategies are focused on defensive, sector confirmed to be the most
the last 5 years average (-16%). The resilient core assets maintaining dynamic, representing the 43% of
number of transactions decreased pressure on prime yields for the the volumes with around €3.6 bn; Europe 33%
significantly: 141 transactions were office and logistics sectors; high a strong competition for core high €2.7 billion
completed (-75 compared to 2019), difficulties in obtaining financing for quality assets characterised the last AP & ME 2%
with an average size of the deals value added operations affected the 12-months’ trend. For the second USA 5%
€0.2 billion
€0.4 billion
(€57 mln in 2019; €59 mln in 2020) investment volume. consecutive year, in 2020 the retail
that remained almost stable. In sector recorded a downtrend Italy 37%
terms of deal structure, the market At geographical level, Milan is the in investments. Although Covid €3.0 billion
recorded an increasing share of most liquid market, accounting for pandemic dramatically limited Global 23%
portfolios, which accounted for over 40% of investments. The total shopping center activities, the €2.0 billion
30% of the total deals (vs to 18% volume recorded in Rome was €1 out of town made a significant
in 2019). The international role billion, significantly decreasing on contribution to the yearly volumes;
is once again decisive for the an annual basis. Rome remains except for Milan and Rome, no other
resilience of the national market. attractively priced. Its great potential cities were involved in the high
International investors are still will put Rome in the investors' focus street market in 2020 confirming the
active and, although decreasing, in the next months. difficulties of the sector and a wait-
maintained a predominant role and-see approach of investors and
in the Italian market (63% of total The 2020 slowdown was mainly landlords.
investment volume vs 75% in 2019). ascribable to the hotel and office
In 2020, the logistics sector 2020 saw the first investment in A slowdown occurred in relation to
reached the highest amount of the Italian PRS market for around office take-up, both in Milan and
volume ever, gaining the 19% of €400 m. The living sector can Rome, while logistics letting market
total investments’ volume (12% count on strong fundamentals, achieved a new record in 2020.
in 2019). Also the alternatives and supply-demand imbalance, stable
healthcare sectors are gaining cash flows, demographic and
a growing share of the market. urbanisation trends.
12 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 13
Outlook hospitality sectors will see a
profound transformation that will
Innovation is likely to reshape
the workplace norm. The short-
The global Covid-19 pandemic lead them to a technological leap. term will still be characterised by
has proven to be an accelerant For Corporate Real Estate leaders, a climate of uncertainty, but with
of change and transformation for this is an opportunity to rethink the a very positive and solid starting
the whole real estate sector that historical workplace models as well from 2022. The current crisis
will last well behind the sanitary as to accelerate the transformation must become an opportunity to
crisis: sustainability, digital and of their portfolios. Companies will rethink and reimagine the entire
technology, flexibility of uses and adapt to a hybrid operating reality: real estate industry.
regeneration will characterise the connectivity, collaboration and
buildings of the future. “hybrid” workplace ecosystems. The real estate can become a
Health and wellbeing are set to driver of development, bringing
Prime office assets, logistics, be the number one investment innovation and strategic visions,
multifamily, data centres and priority for corporate real estate contributing to the design of
other alternative asset classes will over the medium term and this the future of the economy and
continue to benefit from investors’ will impact design, amenities and society.
defensive strategies. Retail and services offered in the workplace.
The current crisis
must become an
We are witnessing structural Capital available for deployment market. PNRR (Piano Nazionale di
opportunity to rethink changes in demand, new ways into real estate is near all-time Ripresa e Resilienza, i.e. National
and reimagine the of living and working, new more
hybrid real estate uses within the
highs and the Italian market
remains attractively priced
Recovery and Resilience Plan) is
a unique opportunity to simplify
entire real estate same building and new ways of compared to bonds and to the PA relations, invest in tourist
defining the value of buildings other main European countries. infrastructure, urban regeneration,
industry based on the ability to guarantee The key ECB interest rates are logistics and green with a
health and well-being. Buildings forecasted to remain at their long-term strategy and attract
and spaces are perceived as an present level in 2021 sustaining investments that could act as a
ecosystem. The asset is not an the market. Secondary markets, multiplier.
“object” in its own right, but a alternatives sectors and Recovery
“square”: inclusive, open and Plan will be fundamental to sustain
integrated within the city. the growth of the Italian real estate
Technology Sustainability Human-centric RE-Imagine
14 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 15
03
The unemployment rate is at 3 Scientific Museums and the The pandemic crisis and the
significantly lower rates compared Leonardo da Vinci Museum. consequent structural changes
to the national average: 5.9% in the Cenacolo Vinciano and Pinacoteca are an opportunity to accelerate
Milan, a successful brand
metropolitan area of Milan and 10% di Brera rank respectively 15th and ongoing transformations starting
in the Italian average. The improved 17th between the top 30 Italian from a lower environmental impact,
employment level is reflected in a Museums. circular economy, digitisation and a
in an ever-changing city
higher per capita income than the more inclusive and equitable growth
Italian average of €31,393 (Lombardy Many of the data available today models.
+15%) and higher consumption on the economy of Milan refer
(Lombardy +16%; Italian average to the pre-Covid period. First Over time, Milan ability to adapt
€30,718 per households). forecasts related to 2020 GDP show to technological, manufacturing
Macro-economic overview a strong contraction (-11%), due and demographic changes is
The tourism sector has enjoyed a to the service-oriented economic what has made it an international
significant growth thanks to 2015 structure of the city. metropolis capable of attracting
The history of Milan spans more many international students yearly. with fashion, design, food, business students, businesses, investments
Expo that has relaunched Milan’s
than 2,000 years and since the 12th Lombardy boasts the highest and sport. Today, it is home to the As for Italy, 2021 will see a strong and tourists. In the medium terms,
image as a city of tourism and
century the Metropolitan City of number of resident graduates, at largest Italian banking groups, the rebound, but GDP will go back the attractiveness of students and
not only a business one. Milan is
Milan has been a great and wealthy over 1.4 million (2019), and it has national stock exchange and most to pre-Covid levels only in 2023. corporates will be a strategic asset.
the 3rd most visited city in Italy,
economic center. Milan is located in invested the most in research and of Italy’s Forbes 2,000 companies. Although the intense decrease In the long term, prospects cannot
with over 8 million of tourists in
the middle of the Po valley and its development (over €5.2 billion in This region accommodates the in tourism, new students are overlook the enhancement of the
the metropolitan city (2019). La
name probably derives from this. 2018) in addition to employing 22% highest number of companies in growing (+1.2% 2021/2022), while cultural and artistic offer in synergy
Triennale di Milano is the most
Milan hosts cutting-edge medical of Italian workers in this sector. the country, with over 811 thousand active companies showed a slight with the creative, fashion and design
visited attraction in the city (635,000
and scientific research centres and Milan’s reputation is associated active businesses (2020). reduction (-0.4% 2020 vs 2019). industry.
visitors in 2019), along with the
prestigious universities which attract
This region accommodates
the highest number of
Milan is the 3rd most
companies in the country
visited city in Italy,
with over 8 million
of tourists in the
metropolitan city (2019)
Milan is the second largest Italian equipment, pharmaceuticals, Università Vita-Salute San Raffaele
city in terms of population and chemistry and electrical devices are are between the first 400 universities
the third biggest economic and among its dominant sectors. Milan of the QS Ranking classification,
industrial hub before Rome and is a renowned centre of excellence which ranks top universities at
Torino. Thanks to the production in research, technology and a global level, while the private
excellence of this territory, Milan’s innovation, as well as internationally university Bocconi ranks 16th for
metropolitan area ranks 1st in terms recognised at the academic level. Social Sciences and Management.
of exports, consolidating its position The renowned Politecnico di Milano,
in the international markets: clothes, Università degli Studi di Milano and
16 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 17
Urban regeneration Porta Nuova has completely
transformed an area of 300,000 sqm
areas. The third tower, Libeskind,
has been completed in October 2020
and transports with buildings which now are the while the construction of a new office
main architectural icons of Milan building, The Portico, will complete
Key figures for the metropolitan area of Milan Milan has always been considered (Bosco Verticale, Torre Unicredit, etc.) the project.
the ultimate Italian economic and, in 2018, this project won the Best
and financial centre. Today Milan Urban Regeneration Projects Award Following the opening of Starbucks
stands for growth, innovation and at MIPIM. Biblioteca degli Alberi, and Uniqlo and the starting of the
development. What has turned the third urban park of Milan, links requalification of The Medelan,
the city from a simple location to a Porta Nuova to Isola district, that has Piazza Cordusio is also undergoing
Inhabitants 3,251,689 (November 2020) Active companies 305,395 (2020) unique destination? been transformed from a labouring a transformation: the project, which
Inhabitants/sq.km 2,064 (November 2020) Multinational companies 10,069 (2019) district to a design and art area includes also via Orefici, via Dante,
Foreigners 451,131 (2020) GDP €176 bn (2017) In the last 10 years, Milan has linking open-air markets and craft via Tommaso Grossi and Largo Santa
Average households’ disposable income € 36,101 % National GDP 10.1% (2017) experienced an extraordinary
(2017; Lombardia) workshops to innovation. Isola, that is Margherita, has been approved. Only
transformation that continues today. now integrated to the rest of the city trams and pedestrians will access
Expo 2015 has been the stimulus that thanks to the new configuration of the the square. Thanks to the new Piazza
has turned the city into a place where Garibaldi-Repubblica area, hosted the Cordusio, the pedestrian area in the
people want to live, work and visit. Design Week, now in a digital version city center is growing: Palazzo Marino
Expo has paved the way for a success following the Covid-19 pandemic has presented the redevelopment
3 Airports University and AFAM (Academies of Art and Music) 20 that has never stopped in Milan. (2020 and 2021 editions). projects of Piazza San Babila that
Roads 2,746 km (directly managed by the Municipality or No. students 220,441 (2019/2020) Urban regeneration has a central role extends up to Università degli Studi
by Città Metropolitana di Milano) % foreign students 9% (2018/2019) in the new strong identity of Milan. A Another relevant urban regeneration located in via Festa del Perdono and
Public transport: 18 tramway lines, 4 trolleybus lines, 133 % students based in other Italian regions 27%
bus lines and 4 underground lines and a metropolitan (2018/2019)
lot of projects have changed the look project is affecting the Fiera district, Largo Richini. The goal is to give
railway service (12 lines), 3 high speed train stations of the city, developing or refurbishing now well known as City Life: 3 office more space to pedestrians, green
Public transport passengers 1.15 million/day not only single assets but also the towers designed by three arch stars and bicycles, as well as a performing
(2020; 2019: 2.3 mln/day)
surroundings. (Hadid, Libeskind and Isozaki), a connection with public transport and
shopping centre, residences and taxis.
public spaces with leisure and play
Municipalities 133 Regional parks 24
Territorial area 1,575.65 sq.km Regional natural reserves 69
Anthropized surface 40.5% Provincial parks 17
Bicycle paths (City) 220 km UNESCO site 1
Tourists 8,016,853 (2019)
% international tourists 57%
Beds 112,818 (2021)
No. visitors to museums 7,731,148 (2019)
Source: ISTAT, Città Metropolitana di Milano, ATM, Infocamere,
Camera di Commercio di Milano Monza Brianza Lodi,
Oxford Economics, MIUR, Legambiente, Regione Lombardia
18 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 19The new PGT 2030, the
redevelopment of the railway hubs
hubs also includes the creation of a
Circle Line, namely a railway semi-
Regarding Scalo Farini, 25 hectares
will be allocated to green and public
Milan Green City development of neighborhoods
with the ongoing redevelopment
• Fall within the limit values o
concentrations of atmospheric
f the
and the underground extensions ring crossing the city to the South, spaces thanks to the creation of a Milan will become a 15 minutes’ city of 80 Milanese squares. PGT 2030 pollutants PM10 and NOx (fine
toward the hinterland, in addition to East and North. park that will link the railway hub with where all essential services, from identifies 1.7 million square meters particles and nitrogen oxides) to
the new M4 metro line that will be Porta Nuova, Bovisa and Mind. Existing the supermarket to the post office of no longer buildable areas, protects protect public health;
operative in the spring, will continue The activities in Porta Nuova area will buildings will be refurbished in order to and the metro stops, can be reached 3.5 million square meters of new
the regeneration of Milan with continue in the next years (The Edge, provide public services, spaces for the from home within 15 minutes on agricultural areas of which 1.5 • Reduce CO2 emissions by 45%
positive effects on the real estate Il Nido Verticale, Pirelli 35, etc.) and Brera Academy and areas dedicated to foot or by bicycle, in the center as million for expansion of the southern by 2030 and become a Carbon
market and the definition of new will involve the neighboring areas children and sports. well as in the suburbs. The Piano agricultural park and plans 20 new Neutral City by 2050;
submarkets. The agreement for the (Corso Como, Gioia/Pirelli, Vittor Quartieri (i.e. Neighborhoods’ Plan) parks. Within the project ForestaMI,
redevelopment of Milan’s railway Pisani and Central Station area). the planting of 3 million of trees in • Contribute to limiting the local
provides the allocation of €1.6 billion.
the metropolitan city is also planned. temperature increase in 2050 to
The new PGT, approved shortly
within 2° C, through urban cooling
before the Covid-19 emergency,
The Piano Aria Clima (i.e. Air and actions and reducing the urban
reflects a wave towards green,
Climate Plan) aims to achieve 3 goals: heat island.
sustainability, regeneration and
During the pandemic, the mobility rediscovering of the neighborhoods the zones with permitted speeds
has been forced to change and find must be accompanied by an of less than 30 km per hour and
a new balance between the need to alternative and healthy mobility expanded the provision of public
move and safety requirements. To offer: walk and go by bikes. The space providing for temporary
compensate the supply reduction program created 35 km of cycle pedestrianisation to allow children
in public transport, the reduction paths in addition to what has to play and have physical activities
of travels, remote working and the already been planned, increased (Play Streets).
The “Piazze aperte in ogni quartiere”
program (i.e. Open squares in every neighborhood)
plans to create new public spaces in place
of redundant roads or intersections.
65 intervention proposals are included
in the planning stage.
The project foresees modular The best-known redevelopment In the former Expo 2015 site, Lendlease
development based on different project related to 2026 Olympics is will develop MIND, Milano Innovation The C40 Group (Cities Climate represents a quarter of the global and Serio). In the second edition
future economic scenarios. Scalo PalaItalia that will be built in Santa District, mixed-use development Leadership Group) founded in 2005, economy. The international call for (2020/2021), 12 cities from all over the
Romana will host the Olympic Giulia district. Development counts of approximately 980,000 sqm is a forum that brings together cities bids provides for the alienation of world are participating (Cape Town,
Village of Milan-Cortina 2026: after more than 200,000 sqm of office comprising public institutions that intend to share strategies for abandoned or degraded sites to be Chicago, Dubai, Houston, Madrid,
the Olympics, the athlete village will spaces and approximately 6,000 sqm (Università degli Studi di Milano, reducing carbon emissions and used for environmental and urban Milan, Montreal, Reykjavík, Rio de
be converted into student housing. of amenities and food&beverages. Human Technopole and Ospedale stimulate global action against regeneration projects, in compliance Janeiro, Rome, San Francisco and
Scalo Grego-Breda will be the first Sky European headquarters are here Galeazzi), as well as office, residential, climate change. To date, the C40 with the principles of sustainability Singapore), 25 competing sites (7 in
Italian district at zero emissions; as situated and also Saipem will move retail&leisure and amenities. gathers almost 100 of the most and resilience. Milan: Piazzale Loreto, Bovisa railway
Grego-Breda, also Scalo Rogoredo in the new district. The remaining important cities in the world (in hub, Scalo Lambrate, areas in via
will be mostly dedicated to social 100,000 sqm will be developed Italy, Milan – which is part of the In the first edition of Reinventing Monti Sabini and Crescenzago, the
housing. Scalo Lambrate takes part across 5 new buildings (University steering committee with London, Cities (2017/2018), 10 cities former Slaughterhouse (ex Macello)
in Reinventing Cities 2. Scalo San and student housing, hotel, Copenhagen and Stockholm in participated, with 20 selected sites area and the Liberty buildings in Viale
Cristoforo will be totally reconverted residential and retail&leisure). Europe - Rome and Venice), has (4 in Milan, including Scalo Greco- Molise). The selection of the winning
in a park for a total of 14 hectares. about 700 million members and Breda, Scuderie de Montel, Doria project will end by March 2021.
20 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 21The Urban Sustainable Mobility metropolitan area. The Milanese According to the latest report by
Plan (PUMS – Piano Urbano della bicycle path will reach 406 kms. Legambiente, Milan is the smartest
Mobilità Sostenibile) contains metropolitan area in Italy due
strategies and guidelines on the Since 2018, ATM - Milan Transport to the fewest number of cars on
future of the mobility in Milan. The Company - has already launched a the road. Today only one in two
goal is to reduce the use of private Full Electric Plan which provides for Milanese use a private car. In order
cars and thus reduce organic fuel the complete conversion of the bus to improve the quality of urban
emissions by almost a third. The fleet into zero-emission vehicles life, Milan is increasingly investing € bn
plan provides an increase of the entirely powered by electricity, in sharing mobility. In addition to 563 516 222 176 164 166 150 140 133 118
zones with permitted speeds of by 2030. All this will lead to a car sharing and bike sharing, the
less than 30 km per hour. The cycle reduction in diesel consumption of smart mobility have also expanded
path connect “30 zones” reaching 30 million liters and a reduction in to mopeds and scooters, with
GDP
London Paris Madrid Milan Barcelona Rome Stockholm Berlin Zurich Dublin
the outskirts of the city and CO2 emissions of 75 thousand tons the idea of experimenting also
integrating with the cycle network per year. with vehicles such as ninebots,
of the other municipalities of the hoverboards and push scooters.
70 charging columns for Bikesharing: 2,600 scooters
electric and hybrid vehicles BikeMI (station-based): 5,430 bicycles (of which 2,540 electric)
(72,000 users and 5.6 mln kms)
Movi (free-loating): 8,000
(3.8 mln kms and 401,000 users)
Carsharing: 3,080 cars Enjoy mln
6,000 (17% electric), Sharen’go 8.9 6.8 6.6 5.5 4.3 3.6 3.2 3.1 2.8 2.6
push scooters 1 mln users Sharenow
Source: a2a, Rapporto Nazionale sulla Sharing Mobility 2020 London Paris Madrid Barcelona Rome Berlin Milan Napoli Lisbon Nord (Lille) POPULATION
GDP forecasts (2019 = 100)
125,0
120,0
115,0
110,0
105,0
100,0
95,0 € bn
90,0 63.1 46.4 33.1 14.4 12.3 9.1 8.3 8.3 7.7 6.8
85,0
80,0
2019 2020 2021 2022 2023 2024 2025 REAL ESTATE Germany UK France Netherlands Sweden Spain Italy Norway Switzerland Denmark
London Paris Madrid Milan Barcelona Roma
INVESTMENTS
Source: JLL elaboration on Oxford Economics
Italian Real Estate Perspective 2021 | 2304
more than 7.5 million of visitors. 2020/2021 academic year the Moreover, the Sapienza University is
The Jubilee, which will take place new enrolments grew by 7% between the first 400 universities in
in Rome in 2025, represents a great on the previous period; Lazio the QS ranking classification.
Rome goes big
opportunity for the hospitality has the second highest number
sector, the food business and the of graduated students in Italy. The presence of renowned
retail activities to rise once again; in The Capital can count the most international brands in the city
addition, the city of Rome could be a elevated number of universities have contributed to make the city
possible candidate for Expo 2030. (17) and AFAM (Academies of Art an important centre of fashion and
Macro-economic overview and Music) institutes (15); half of design, and the Cinecittà Studios have
The Capital hosts the highest the telematic universities of the been the set of many Academy
With more than 4 million of flat but mostly consists of hills and number of university students: in Country is here located. Award–winning movies.
Rome is the capital of Italy and the
seat of the Italian Government. It inhabitants living in around small mountains, among these we
is the heart of Catholic Christianity 1,287 sq km, it is the 1st Italian mention the famous seven hills of
and the only city in the world to city for number of people and Rome. The city is crossed by the river
host an entire state, the enclave the largest municipality of the Tevere and its tributaries, including
of the Vatican City: for this reason, Country. It is located in the the Aniene; the surroundings include
it is often defined as the capital of central part of Italy in the region also several lakes such as Bracciano,
two states. of Lazio; the territory is partially Albano and Nemi.
Rome is the city with
the most hectares of
green in Europe
The 1st Italian city for number
of people and the largest
municipality of the Country
At the European level, Rome is disposable income (respectively Even if some indicators showed
confirmed to be among the top -10% and -5%), but a rescue is negative signs in the last year
It is known worldwide as the companies. Numerous international in 2018 and more than 26,000
economies. The GDP showed a forecasted from 2022. due to the pandemic, the capital
“Eternal City”, its history in fact spans headquarters, government researchers).
decrease in 2020 (-8%) compared of Italy can count on a solid
more than 2,500 years. Today it is a ministries, conference centres and On the other side, the
The fame and the wide offer of to the year before, but it should background and an elevated
modern and cosmopolitan city but sports venues are located in the unemployment rate in the Capital
monuments, churches and historical come back to pre-Covid levels attractiveness for employees,
its influence in politics, media, arts city. The headquarters of three stood at 9.0% in 2019, a figure
points of interest make the city one in 2022. A contraction in the students, new business and
and culture is still vivid. United Nations organizations lower compared to the national
of the main tourist destination in last year was also observed in tourists which will help the city to
are here situated: the Food and average of 10%.
The city is a centre for banking as the world and the 1st in Italy. In 2019 total consumer spending and shine again in the coming years.
Agriculture Organization (FAO), the
well as for IT, pharmaceutical and International Fund for Agricultural more than 30 million of presences
aerospace industries and Development (IFAD) and the World in accommodation facilities were
international law firms. Today, Food Program (WFP). The region recorded regarding both residents
it is home to 3 of the 5 Italian of Lazio is the second in Italy and non-residents people. The
Fortune 500 companies and for investments in research and Colosseum is the most visited
most of Italy’s Forbes 2,000 development (over €3.4 billion Italian museum, counting in 2019
24 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 25Urban regeneration of modernity and brightness and
could be sustained by The Recovery
long, which should remind the
skyscrapers of Porta Garibaldi in Milan
projects and green Plan which includes a generous or the Défense in Paris.
amount allocated to Rome.
Key figures for the metropolitan area of Rome strategies Another possible regeneration project
The area of the former Fiera of Rome consists in the former Mercati Generali
The dated stock of Rome presents a located in the E.U.R. Colombo district in Ostiense district with around 85,000
great opportunity for the real estate has finally received from the regional sqm of surface which should be
market to redevelop and make Council the approval to make urban completely transformed.
changes of destination of use to changes in order to redevelop the
Inhabitants 4,253,314 (January 2020) Active companies 369,285 (2020) several assets, giving them a rebirth. entire complex. The total area of It is worth of note mentioning also
Inhabitants/sq.km 793 (January 2020) Public limited companies 156,877 (2020) Certifications not only such as LEED approximately 44,000 sqm will be the “Milleperiferie” project which in
Foreigners 509,057 (January 2020) GDP €163 bn (2017) and BREEAM but especially those like destined for the 80% to residential Rome aims to the redevelopment
Average households’ disposable income € 32,297 % National GDP 9.4% (2017) of the North-West Quadrant and the
(2017; Lazio) WELL and HSE (Health, Safety and (with a component of social housing)
Environment) Management System and the remaining 20% to services; an Southern coastal area. The city could
are becoming increasingly popular international context will be made to become even larger by overcoming
with the pandemic. Many companies select the best project. administrative boundaries in an urban
are moving to get them for their continuum: strategic services and
buildings, like CDP for example for In the east side of the Tiburtina functions will be concentrated in the
2 Airports (of which 1 international; +2 only for freight transport) University and AFAM (Academies of Art and Music) 32 Towers of E.U.R.. Station, a new business center district central zones while the peripherical
Airport passengers 49,412,069 (2019) No. students 232,273 (2019/2020) should be created, with towers of districts could become more vivid and
Public transport: 6 tramway lines, 2 trolleybus lines, 345 % foreign students 5% (2018/2019) The capital of Italy has also different 90 meters high and stained-glass contribute to diminish the congestion
bus lines and 3 underground lines and a metropolitan % students based in other Italian regions 33%
railway service (11 lines), 2 high speed train stations (2018/2019) projects of urban regeneration which buildings. The aim is to create a new of the connecting arteries and the
Public transport passengers 2.4 million/day could donate to the city a new wave modern neighborhood, a 1 kilometer inefficiency of public services.
(2018)
Main urban regeneration projects
Municipalities 121 Regional parks 16
Territorial area 5,363 sq.km Regional natural reserves 31
Anthropized surface 23.8% National parks 3
Bicycle paths (City) 254 km UNESCO site 1
Tourists 21,656,481 (2019)
% international tourists 64% (2018)
Beds 173,107 (2020)
No. visitors to museums 24,490,692 (2019)
Source: ISTAT, Città Metropolitana di Roma, ATAC, Infocamere,
Camera di Commercio di Roma, Oxford Economics, MIUR,
Legambiente, Regione Lazio
Legend Former Fiera Former Mercati Generali Tiburtina station
26 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 27Due to the Covid-19 pandemic, The Urban Sustainable Mobility 150 km of transitional cycle paths,
topics such as sustainability and Plan (PUMS – Piano Urbano della making Rome the first European
wellbeing became even more Mobilità Sostenibile) has been city for number of km of new cycle
important and strengthened in created in order to satisfy the paths announced up to the period
everyone perception. Giving a good mobility needs of the citizens. in September 2020 according to the
quality of transports to the citizens, The aim is to provide to all the ECF (European Cyclists' Federation).
a sustainable landscape and a inhabitants access to transports, This also includes measures for the
higher environmental quality are improve safety conditions, reduce reduction of traffic, the creation of
among the top priorities for the local air and noise pollution, increase segments car-free roads and the
administrations. the efficiency and economy of enlargement of sidewalks.
the transport, contribute to the
The city of Rome is the one with attractiveness of the area and the The Capital participates in the
the most hectares of green in quality of the urban environment. Reinventing Cities program to
Europe, thanks to its heritage In this direction, the City is trying transform abandoned areas and
which has no equal in the world: to limit the vehicular transitions buildings into innovative places,
the variety of green represents in certain districts, guarantee with projects selected through
the 67% of the overall area. This more bright pedestrian crossings expression of interest and competitive
is contributing to move through a and pedestrian areas, encourage procedures aimed at investors,
more sustainable approach across the livability and local functions. operators, designers, stakeholders
the implementation of different Moreover, it has been approved and local communities. In the
strategies. an extraordinary plan to create current edition of 2020/2021, Rome is
>100 charging columns for Bikesharing: 2,020 scooters
electric and hybrid vehicles Helbiz / Jump (free-floating): 3,500 (of which 1,800 electric)
bicycles (250,000 users and 235,000 kms)
Carsharing: 2,367 cars Enjoy
11,000 (26% electric), Sharen’go
push scooters 780,000 users Sharenow
Source: Roma Capitale, Rapporto Nazionale sulla Sharing Mobility 2020
attending in competition with other Group), a network of 100 cities involves Italian, French and Croatian
11 global cities proposing 4 different which aims to improve the partners, which aims to promote the
sites (Former Filanda, Former health, wellbeing and economic sustainable use of land as a strategic,
Mercato di Torre Spaccata, Former opportunities of urban citizens limited and non-renewable resources.
Mira Lanza, Rome Tuscolana). reducing the climate changes risks.
Reinventing Cities is a C40 Group’s Rome is also one of the partner of
project (Cities Climate Leadership Soil4Life, a European project that
28 | Italian Real Estate Perspective 202105
Even if the homeworking will be (cafés, hotel lounges), satellite not a simple space where to go. In this
strongly utilised also in the future, locations and partner offices. perspective, the workplace will have
the office will maintain its central to be more human-centric than ever:
Office
role and the organisations will have The future workplace will be the focus will consist in enhancing
to evaluate and integrate distributed anywhere and at any time, with the office in terms of collaboration,
working models for the long term. the traditional office acting as the innovation, talent attraction &
The hybrid solution will consist in central hive of productivity and retention, health and wellbeing.
evolving from the “Work from home” center of innovation, providing
2021 is expected to be one of two logistical flexibility should help to to new and changing conditions
to the “Work from anywhere”. employees with opportunities for The first focus of the companies is set
halves, with very cautious optimism keep the overall office utilisation will be essential for future success. social interaction and engagement, to be the mental and physical health
that the second half of 2021 should and occupancy more stable than Companies should explore Employees will have the opportunity learning and team-building activities. of the employees. The pandemic
lead to the release of some pent- previously anticipated. solutions that fit and flex with their to work for instance in coworking The office will become one of the has caused in many people the
up demand as vaccination rollouts organisation best – particularly the
Corporate occupiers are accepting spaces, client sites, third places available instruments to choose from, fear of going to the offices, so one
result in reduced restrictions and a hybrid work model combined with a
move back towards a new normal. that they may never operate again in digital-first approach.
Lower workplace density and the way they did pre-crisis and that
reconfigurations to handle greater the ability to continuously adapt
What kind of services would you like to have access to?
Well-being services 39% 34%
Advanced food services 38% 34%
The future of offices remote solution 2/2.5 days a week:
working from home will diminish
Health services 37% 34%
Sports services 38% 24%
since employees will miss the office
The Covid-19 pandemic ‘Life is easy’ services 40% 20%
needing interaction to generate
has accelerated the digital new ideas. In addition to this, for
Mobility solutions 37% 21%
transformation and changed our many people their home living Service desks... 38% 17%
behavior and habits, especially in arrangements make working from Cultural services 37% 15%
relation to the way we work. The home a below optimal choice, with Beauty services 35% 16%
forced use of remote working during its limited space, lack of privacy and Childcare services 26% 17%
the lockdown restrictions has led more distractions. This is particularly This would be nice This would be wonderful
employees to change their approach true for the younger generation, with
and rethink about their needs. global JLL survey data indicating
that 64% of millennials are most Source: JLL Human Experience 2020 survey
On the other side, the remote
eager to return to the office, the
working booming has pushed
highest percentage of any age
many companies to study strategies
group. Therefore, the direction of
towards the future of the office, of the main target is to create
the companies won’t be to get rid
rethinking about their spaces and places in which employees can be
looking for new concepts.
of spaces, but to create places that
comfortable as they are at home: Touch-free solutions and easy-to-clean
will have to adapt to the new needs,
After the pandemic, we estimate that hybrid and human centric spaces.
seating that will allow for social
distancing, the use of greenery as
materials will set new standards to ensure
employees will continue to adopt the an aesthetically pleasing, equipped employees feel safe in common spaces
break areas that reproduce the
comforts of a home environment,
guarantee indoor air quality, hygiene
and constant cleaning.
30 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 31As a smaller number of employees is rise in the short-term as companies carbon decisions like: The demand will gravitate toward opportunity to convert the existing to adapt to continuous shifts in
forecasted to be on site, the model need to adapt to a hybrid reality. The high-quality assets, smart and space: in Rome the grade A vacancy demand (lockdowns and relaxation
of the hubs&clubs could be adopted, priorities in 2021 will shift towards • Occupy or acquire net zero sustainable buildings that can represents just the 19% of the phases) in an uncertain future and
consisting in the existence of a digital enablement such as seamless carbon buildings support companies’ environmental, overall vacancy, while in Milan the office adaptations that will be
central representative office to which connectivity and collaboration health & wellness and employee stands at 16%. made are likely to mitigate some
smaller and more flexible secondary between office and home, touchless • Adopt sustainable design experience initiatives. The large of the reduction in office demand
offices will be added. The need for digital interface with the workplace, principles and specifications amount of dated stock and Companies will require a high arising from higher levels of
individual workstations will diminish real time workplace analytics and when looking to develop, available spaces suggests the level of elasticity in their strategy homeworking.
and will be replaced by diversified performance management, virtual refurbish, or fitout assets
workspaces to accommodate more reality simulator systems.
• Manage assets towards net zero
types of businesses, such as sofas
A greater attention will be paid also carbon by optimising a building
and bar-style counters for informal
group work sessions and isolated to the sustainability, in order to Milan and Rome office “Hybrid” workplace
• Agree lease clauses to align availability by grade ecosystems
niches for individuals. achieve net zero carbon emissions
with the net zero carbon target
and fight the global climate crisis.
The investments in technology will Companies should take net zero Rome
16%
19% Partner
Coworking
16% offices
25%
Milan Client
Office adaptations Hotels
sites
Conference Third
center places
Virtual Satellite
Relaxing seating densities 59% Grade A reality locations
Grade B Home
They could be more present in the post-Covid-19 65% Grade C
offices as we do not anticipate density to tighten
back to pre-Covid-19 levels
Flexible workspace Therefore, it is not surprising that
during the last year the new flex
limited growth as the office leasing
market will remain influenced by the
Adaptive space management The Covid-19 pandemic caused many openings recorded a slow down all pandemic. The challenges for the
to allow for peak usage issues to the brand of flex markets over the world: flex take-up decreased operators will be first of all to cut costs
in 2020. Some have increased by 79% globally YoY and by 66% waiting to the market recovery, then to
This solution can support the flexible flow of the frequency of cleaning, some in Italy. In Milan and Rome 7 new rationalise the assets and reposition
workers throughout any week have stopped all events or closed openings were recorded (6 of which their portfolios. From 2022 the market
common spaces, while others have are located in Milan), while in the is forecasted to improve: we could
closed down fully. Many flex offices previous year 23 new centers were assist to an increase in the demand
recorded extremely low utilisation inaugurated. In 2020 the flex take-up of flex spaces, with companies needs
More formal & informal rates and in some cases were in Europe represented the 4% of the coming back and self-employed
collaborative spaces practically empty during the last overall absorption, while in Milan this people looking for a place to start
year; as a consequence, they were value drops at 2%. their own business like it happened
More meeting rooms and video reality spaces will under pressure to provide discounts, in the last recession. In the long-term
stimulate the interaction between employers incentives or postponement of Major operators such as WeWork has larger occupiers will look for high
payments, while the wide use of paused expansion plans all over the serviced flexible spaces and we can
short-term contracts gave the users world and is exiting unsuccessful expect more landlords to enter this
the possibility to step away during the locations, looking to restructure a market contributing to accelerate the
Amenities/ spaces supporting pandemic. significant portion of its portfolio. flex industry.
sustainability, health & wellbeing focus For the next year it is expected a
More space will be dedicated to inhouse
amenities, green space, health & wellbeing
32 | Italian Real Estate Perspective 2021 Italian Real Estate Perspective 2021 | 33You can also read
