Italian real estate market, statistics by sector and forecast for 2021

Italian real estate market, statistics by sector and forecast for 2021

In 2020, in the real estate sector, the situation with the pandemic affected different segments in different ways. The report, produced by the Gabetti and Patrigest Research Center, analyzed the residential, office, commercial, hospitality and private sectors, this year’s trends and the outlook for the future. Housing sector: forecast for 2021 Key data for the first 9 months of 2020. According to the Agencies, there were 374,545 transactions with housing, which is 13.9% more than in 2019. Changes in the 3rd quarter by + 3.1% compared to the 2nd last year. The health and isolation areas have been hardest hit by the effects of the pandemic. First of all, growth in small towns by +8.1%, decline in metropolitan areas by (-6.7%). According to surveys conducted in agencies such as (Gabetti, Prefessionecasa and Grimaldi), in the first 9 months of 2020 in large cities, the price difference was about -1.1% compared to 2019, remained stable for an average of 4.5 months, there was an increase in discounts during negotiations, about 12%. What did the end of 2020 show? Small price cuts only for peripheral areas or for assets that do not meet the current demand for housing in terms of type and size, in the context of sales, fell by about 15-20%. . The Tax Relief Decree of May 2020 has opened important opportunities for the development of the real estate sector, which will be realized especially in 2021, thanks to the “110% bonus” that allows more economical consumption; for specific energy efficiency, anti-seismic measures, installation of photovoltaic systems, as well as infrastructure for charging electric vehicles at buildings. New trends 2021: Multifunctional home with large dimensions and modular spaces for home office. Property with an open yard with a garden or a terrace, designed as an exit from the house. Apartment buildings with Services such as a locker, gym, and multifunctional rooms. With great demand for / purchase of second homes, to use the office at home (after the situation with the pandemic or the surge of new ones), the desire to spend holidays in their personal home has grown. The decrease in value will characterize specific cases (objects that do not meet demand) that already had low liquidity due to location. In general, for apartments of good quality or new builds in major cities, there will be a reduction in demand, but not in value. In Milan, the Bodio Center worth €220 million, the Crédit Agricole property for €140 million and the Kryalos office portfolio which includes Palazzo Mellerio and Piazza Velasca 7/9 for €87 million. In Rome, the deal on via dell’Arte 25 worth about 200 million euros should be noted; finally, the portfolio of the Core Multiutilities Fund, distributed among Turin, Genoa, Parma and Reggio Emilia, is about 100 million euros. Investments in the capital market in the first to third quarter of 2020: 2.4 billion euros At the end of 2020, there was no significant reduction in rental rates and sales prices. In terms of rent, tenants are negotiating with landlords to get a discount/facilitation package, with greater use of staggered rent, while maintaining the same rent. When faced with economic difficulties on the part of companies, there may be situations of arrears or inability to collect rent; moreover, in some cases, the use of work from home may become permanent for some activities, resulting in a reduction in the use of office space and the termination of leases, which will lead to an increase in the vacancy rate. In connection with the present situation, at the request of a reduction in rent, the owners may request an extension of the term of the contract. Retail sector: trends and forecast for 2021 What are the key data for the first 9 months of 2020? While on the one hand the health emergency and lockdowns have had a significant impact on retail, on the other hand there has been an increase in demand for large-scale distribution of services integrated with logistics. In terms of investments, in the first nine months of 2020, investments amounted to 890 million euros (17% of the total investment). This was supported by operations in shopping malls and mainly by the deal closed by Unicredit through the acquisition of 32.5% of the capital of La Villata S.p.A, a real estate company controlled by Esselunga S.p.A. At the end of 2020, in terms of retail investment, especially foreign investment, we can expect a contraction due to the uncertainty of the moment with an increase in the cost of capital and spread. In situations that were already critical before Covid-19, we could, in the short term, see streamlining of sales networks, the search for a new identity, physical formats that need to be resized or expanded, repositionings, acquisitions, mergers and closures. Re-employment may occur, but other employment opportunities may arise: building a realistic and optimistic vision of the future now helps to be ready for retraining. New trends 2021: Covid and the health emergency have actually accelerated trends already in place, starting with omnichannel, with strong online-offline interaction and innovation at the forefront. Changes in the shopping process through increased use of technology (eg interactive changing rooms) and greater attention to health and hygiene aspects. Greater adoption of cashless methods by retailers to avoid queues and make shopping more enjoyable and even safer. Active development of retail and network applications for shopping and online shopping. Resumption of vending on the basis of vending machines, expanded and geographically distributed. In the area of valuations, ERV is expected to decline, especially in the medium term, due to the non-permanent part of the turnover, which has declined significantly. Value will also be affected by a higher cost of capital and increased operating costs, for example due to adjustments and sanitization. Retail sector: trends and forecast for 2021 Key data for the first 9 months of 2020. For Italian hotels, 2020 started off in the best possible way with an increase in overnight stays (+3.8% foreign and +4.8% Italian) in January compared to 2019 (Federalberghi data). However, in February, due to Covid-19, the first decline occurred until the market was locked down in April. At the beginning of the summer, Federalberghi announced that only 40% of Italian hotels were open, the percentage of which then doubled significantly from July to August, but the remaining 20%, located mainly in cities, did not open until September, and many remained closed. In the first 9 months of the year, investments amounted to about 680 million euros. Major transactions in the first three quarters of 2020 including the 5-star luxury Bauer hotel in Venice taken over by Signa Group and the sale by Värde Partners to Covivio of a portfolio of 4 high-end hotels under the Dedica Anthology brand. What’s at the end of 2020? The rese New trends 2021: The hotel of the future must be a flexible, multi-faceted, hyper-technological and environmentally sustainable space that can transform itself by updating content and functionality to create new social and economic value. Premises and services for online work. An ideal place to socialize, relax or meet other people. Zones of psychophysical relaxation. Multifunctional spaces that can be transformed for events. Bars and restaurants with a varied offer 24 hours a day. Services for recreation and sports. The possible continuation of the health emergency and the resulting reduction in business travel could lead to a decrease in demand for large business hotels. On the part of investors, this could lead to an expectation of higher returns for these asset classes, offsetting the greater riskiness of the moment. As a rule, investments are not immediately renewed, and except for some speculative transactions and for less stable types, there will be a decrease in turnover and, as a result, fees, especially for the variable part, an increase in the cost of capital and difficulties. By far the least vulnerable structures last season were those in suburban markets and small residential centers in tourist areas, in some southern regions and in some mountainous areas. arch center Federalberghi estimates that the total decrease in overnight stays in 2020 will be 56.1%, or approximately 245 million nights (-74% non-residents and -37.9% Italians). Over the next 2/4 years, international experts predict progressive growth with a return to the results achieved in 2019, even if the time variable depends on the spread of the vaccine. It is reasonable to think that starting from 2024/2025, if other disruptive factors do not intervene, tourist flows will resume their natural evolution. Opportunities for the future include: increased demand for online workspaces, daytime hotel use, increased weekday and low season demand, business/leisure conflict, seniors versus medical tourism, empty space reconversion/repurposed use. Retail sector: trends and forecast for 2021 What are the key data for the first 9 months of 2020? In the logistics market, investments totaling around 670 million euros were recorded. Of particular note are the 4 “last mile” logistics sites with a total area of approximately 58,000 m2 acquired by Kryalos in Tuscany through the Aphrodite Fund, the Trecate hub (162,000 m2) acquired by DWS (Deutsche Bank Group), and the logistics sites of Chiari and Vigasio taken over by Nuveen Real Estate for 80 million euros. As for the impact of the emergency, despite the initial slowdown in food storage dynamics associated with the lockdown in March and April, logistics activities have played an important role, especially in ensuring the continuity of the supply of goods in each category against the exponential growth of online shopping. According to the contract logistics observatory Gino third Marche, the turnover of Italian-party logistics companies in 2019 amounted to 86 billion euros, up 0.8% compared to 2018. For 2020, the estimate is 77.8 billion (-9.3% compared to 2019).