Con il patrocinio dell'ice - Agenzia per la promozione all'estero e l'internazionalizzazione delle imprese italiane Annual Italian Real Estate Market Report 2014 Copyright 2014 World Capital. All Rights Reserved.
Copyright 2014 World Capital. All Rights Reserved.
Con il patrocinio dell'ice - Agenzia per la promozione all'estero e l'internazionalizzazione delle imprese italiane Annual Italian Real Estate Market Report - 2013 Index Italy In European Context Annual Inflation 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 2 3 3 4 4 5 5 6 6 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 confidence Consumption Trends - Italy 22 24 25 26 26 27 28 30 31 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 Office 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 Office Markets-Annual Rent -Annual Yield Investments in the Office Sector - Italy 8 9 10 12 13 13 14 14 15 15 16 17 18 19 20 21 21 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 flows Hotel Revenues -top 10 locations by revenue per night - Italy Tourism Flows - Italy 32 34 35 36 37 38 39 40 42 43 44 46 46 47 48 48 1
ITALY Regions Provinces Municipalities Population Foreign residents Number of families Average family members 2 20 110 8.092 60.626.442 4.570.317 25.175.793 2,4
Annual Inflation Rate Year 2013 Consumer Price Index Source: Eurostat 0.00-0.85 0.9-1.7 1.7-2.6 2.6-3.4 3-17 17-30 30-43 43-56 Population Density - Europe Year 2013 Inhabitants per square kilometre Source: Eurostat 2-27 27-52 52-77 77-102 102-4,080 4,080-8,060 8k-12k 12k-16k 3
Gross Fixed Investment Year 2013 Percentage of GDP Source: Eurostat 13-15 15-17 17-18 18-20 20-26 26-31 31-37 37-42 Foreign Direct Investment Stocks Year 2013 Source: OECD International direct investment database Units: USD billion INWARD Europe 2009 2010 2011 OUTWARD 2012 2009 2010 2011 2012 Europe Units: USD billion 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 - Denmark Estonia 16.2 16.5 16.7 18.8 6.4 5.7 4.7 5.8 Estonia Finland 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 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 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 4
Foreign Direct Investment Flows as a percentage of GDP Year 2013 Source: OECD International direct investment database Units: % INFLOWS OUTFLOWS Units: % Europe 2009 2010 2011 Czech Republic Denmark Estonia Finland France Germany Greece Italy Poland Spain Sweden Switzerland Turkey 2012 2009 2010 2011 2012 Europe 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% Czech Republic Denmark Estonia Finland France Germany Greece Italy Poland Spain Sweden Switzerland Turkey Memo items: Memo items: EUROPEAN UNION 2.4% 2.4% 2.7% 2.0% 2.6% 3.4% 3.4% 2.5% EUROPEAN UNION G-20 countries 1.5% 1.7% 1.9% 1.6% 1.8% 1.9% 2.0% 1.7% G-20 countries OECD G-20 countries 1.2% 1.3% 1.5% 1.2% 2.1% 2.2% 2.5% 2.2% OECD G-20 countries Other G-20 countries 2.5% 2.6% 2.7% 2.5% 0.9% 1.0% 0.8% 0.7% Other G-20 countries Argentina 1.3% 1.9% 2.0% 2.3% 0.2% 0.3% 0.3% 0.2% Argentina Brazil 1.6% 2.3% 2.7% 2.7% - 0.5% - - Brazil China 2.3% 3.1% 3.1% 3.1% 0.9% 1.0% 0.6% 0.8% China India 2.6% 1.7% 2.0% 1.3% 1.2% 0.9% 0.7% 0.4% India Indonesia 0.9% 1.9% 2.3% 2.2% 0.4% 0.4% 0.9% 0.6% Indonesia Russia 3.0% 2.1% 2.0% 1.6% 3.6% 2.8% 2.6% 1.6% Russia Saudi Arabia 9.7% 6.4% 2.7% 2.1% 0.6% 0.9% 0.6% 0.5% Saudi Arabia South Africa 2.0% 0.3% 1.5% 1.2% 0.4% - 0.7% 1.1% South Africa Gross Domestic Product Year 2013 Source: Eurostat 1-47 47-92 92-138 138-184 184-962 962-1,740 1,740-2,518 2,518-3,296 5
Italy Land of Beauty 6
Italian Regions Population Density Year 2013 Inhabitants per square kilometre Source: ISTAT (Italian National Institute of Statistics) < 100 101-200 201-300 300 < Italian Regions by GDP Per Capita Year 2013 Italy annual Index number=100 Source: 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 Italian Regions Land Consumption Source: ISPRA 2013 1956 <1.5% 1.5% - 3% 3% - 4.5% 4.5% - 6% 6% - 8% 8% < 8
Italian Real Estate Segments Residential Luxury Mid range Vacation house Offices Business Districts Miscellaneous Retail High streets Retail parks Commercial centres Outlets Industrial Production plants Logistic Hospitality Hotels Agritourisms Leisure (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; Why invest in Italian residential sector? recent acceleration in external demand for residential property from international clientele, especially from those requesting the Italian residence permit; growth of new development potentials with high profitability such as the university residence, residences for the elderly and etc.. 10
2. Vacation house Mountainside Seaside Lakeside 1. Luxury Penthouses In Historical Centers Villas In periferies In Italy, the term holiday home is also known as second home. In this category we find 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 find employment in the northern 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, investmentoriented ones. In recent years though, the financial 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 fluctuations in various Italian locations. 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 financial 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 influencing the depreciation 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. 3. Mid range In Historical Centers Apartments In Peripheries Apartments Villas 11
European Residential Market /sq m Year 2013 Source: World Capital and Global Property Guide Monaco United Kingdom Switzerland Russia France Sweden Finland Italy Luxembourg Austria Netherlands Denmark Czech Republic Ireland Spain Greece Andorra Germany Belgium Poland Montenegro Turkey Ukraine Malta Slovenia Lithuania Romania Slovak Republic Serbia Cyprus Latvia Croatia Estonia Hungary Portugal Macedonia Bulgaria Moldova 6991 6220 6188 5669 4567 4234 3933 3758 3750 3630 3536 3330 3306 3124 3108 3094 2905 2807 2748 2573 2373 2371 2244 2239 2238 2156 2081 2065 1831 1741 1232 1151 965 12610 12227 11229 24252 39273 0 5000 10000 15000 20000 25000 30000 35000 40000 12
Residential Sector Performance - Europe Prime Markets Price index (31/12/2000 = 100) 2000-2013 Source: Elaboration by World Capital on data from OECD - Bank of Italy - Agenzia del Territorio Germany France Italy UK Spain Irland Euro area 230 210 190 170 150 130 110 90 70 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Net Yield Of Urban Residential Properties By Region Year 2013 Source: Elaboration by World Capital on data from Banca of Italy - Agenzia del Territorio - ISTAT 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% Piemonte Liguria Lombardia Veneto Friuli V. Giulia Emilia Romagna Toscana Marche Umbria Lazio Abruzzo Molise Campania Puglia Calabria Basilicata Sardegna Sicilia Valle D Aosta 13
Italian Household Wealth And Its Components 1995-2011 Billions of euro at current prices Source: Bank of Italy 10.000 9.000 8.000 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0-1.000 1995 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 Tenancy Status -Italy Percentage Year 2013 Source: Bank of Italy Prediction 100% 80% 60% Rent Social Housing Owner 40% 20% 0% 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 14
Number of Constructed Dwellings - Italy Year 2013 Source: 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 requalification of properties have maintained their edge (+0,5%) in the past twelve months. This positive trend is the result of financial 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. 350 300 250 200 150 PREDICTION 100 50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Elevated Building Lifespan Building Renovation Subsidize up to 55% of the total costs Source: www.agenziaentrate.gov.it In Italy, the lifespan of real estate products is guaranteed by specific fiscal 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 fiscal policies. Thanks to these favorable fiscal 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 fiscal 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 profitability of properties - Exert greater control over land use consumption 15
Office Sector Business District Miscellaneous Why invest in Italian office sector? The Italian Office real estate will be affected 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 companies, 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 offices in Italy. 16
Annual Rent - Prime locations by Continental Ranking /sq m pa II semester 2013 Source: World Capital Asia - Pacific Europe Americas Rio de Janeiro Sao Paulo San Francisco Bogota Vancouver Lima London west end Moscow Zurich Paris Stockholm Oslo Milan Frankfurt Istanbul Rome St. Petersburg Madrid Brussels Warsaw Prague Barcelona Budapest Hong Kong Tokyo Shanghai Beijing New Delhi Singapore Sydney Dubai Mumbai Melbourne Kuala Lumpur Seoul Milan Rome 0 200 400 600 800 1000 1200 1400 17
Annual Rent - Prime Global locations /sq m pa II semester 2013 Source: World Capital 0 200 400 600 800 1000 1200 1400 London west end Hong Kong Tokyo Moscow Rio de Janeiro Zurich Paris Shanghai Beijing New Delhi Singapore Sydney Sao Paulo Stockholm Oslo Dubai Milan Mumbai San Francisco Frankfurt Istanbul Rome Melbourne Bogota St. Petersburg Vancouver Madrid Brussels Warsaw Prague Kuala Lumpur Barcelona Budapest Seoul Lima Milan Rome 0 200 400 600 800 1000 1200 1400 18
Rental Variation Rate - Prime Global locations % 1st / 2nd semester 2013 Source: World Capital Bogota Dubai San Francisco Shanghai Lima Melbourne Frankfurt Tokyo London west end Singapore Prague Istanbul Mumbai Stockholm Milan Moscow Brussels Hong Kong Zurich New Delhi Oslo Rome Vancouver Madrid Kuala Lumpur Budapest Rio de Janeiro Warsaw Seoul Sydney Beijing Barcelona Paris Sao Paulo St. Petersburg -10% -5% 0% 5% 10% Milan Rome -10% -5% 0% 5% 10% 19
Vacancy Rate- Prime Global locations % II semester 2013 Source: World Capital Dubai Budapest Kuala Lumpur New Dehli Barcelona Mumbai Prague Frankfurt Moscow Brusselles St. Petersburg Sao Paulo Milan Stockholm San Francisco Warsaw Madrid Sydney Istanbul Seoul Melbourne Singapore Beijing London West End Oslo Paris Shanghai Zurich Rome Rio di Janeiro Tokyo Hong Kong Bogota Vancouver Lima Milan Rome 0 5 10 15 20 25 30 35 20
Main Italian Office Markets Annual Rent /sq m pa II semester 2013 Source: World Capital 500 450 400 350 300 250 200 150 100 50 0 City Center - CBD Milan Torino Padua Bologna Rome Florence Naples City Periphery City Center Periphery City Center Periphery City Center Periphery City Center City CBD (Eur) Periphery City Center Periphery City Center Periphery Annual Yield % II semester 2013 Source: World Capital 8,5 8,0 7,5 7,0 6,5 6,0 5,5 5,0 Milan Torino Padua Bologna Rome Florence Naples City Center - CBD City Periphery City Center Periphery City Center Periphery City Center Periphery City Center City CBD (Eur) Periphery City Center Periphery City Center Periphery Investments in the Office Sector - Italy Source: Bank of Italy In the second semester of 2013, more than 45% of total investments in Italian real estate market is registered for office sector which shows its appetability of this sector for investors. 45,4% Office Markert 54,6% Other Markerts 21
Retail Sector Why invest in Italian hospitality sector? 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 flows; 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. 22
Types of Retail spaces in Italy High Streets Retail Parks Commercial Centers Outlets Nowadays there are four main commercial property categories in Italy: outlets, malls, high streets and shopping 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 figure 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 different 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. 23
Italian high streets Every Italian town has at least a shopping street. This statement is built on the assumption 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 influence 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 developed over time and that is therefore available in limited supply. This acknowledgement is helpful in understanding why property in such locations retain high values and yields, keeping investment risks at bay. 24
Annual Rent - Worldwide High Streets /sq m pa II semester 2013 Source: World Capital CITTÀ HIGH-STREET 0 5000 10000 15000 20000 25000 Hong Kong Causeway Bay New York Fifth Avenue Hong Kong Russell street London Oxford Street - West Paris Avenue des Champs-Elysées Zurich Bahnhofstrasse Sydney Pitt Street Mall Milan Via Montenapoleone Rome Via Condotti Moscow Tverskaya Tokyo Ginza (Chuo Street ) Geneva Rue du Rhone Vienna Goldene U Munich Kaufingerstraße Shanghai Nanjing Road West Berlin Tauentzienstraße Frankfurt Zeil Beijing Wangfujing Hamburg Spitalerstraße Saint Petersburg Nevskij Prtospekt Madrid Istanbul Oslo Amsterdam Delhi Dublin Seoul Prague Brussels Rio de Janeiro Mumbai Dubai Puerta del Sol Preciados Baghdat Karl Johan Gate Kalverstraat Khan Market Grafton Street Myeongdong Na Příkopě Rue Neuve Garcia d`avila Linking Road Sheikh Zayed Road 10150 8100 7400 6700 6390 6100 5430 4930 4800 4100 3950 3960 3840 3700 3360 2660 2480 2460 2400 2350 2210 2170 2100 2040 1730 1700 1145 310 13400 22320 22050 21340 25
Prime Retail Markets - Italy Source: World Capital Milan Cortina Turin Venice Verona Bologna Florence Porto Cervo Rome Bari Naples Palermo Retail Property Supply- Italian Market % 2013 Source: The National Institute for Statistics (ISTAT) - Bank Of Italy 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 highstreets in center and south of Italy. South 23.1% Islands 10.8% North East 16.3% North West 24.80% Center 25% North 41.1% 26
Annual Rent - Italian High-Streets /sq m pa II semester 2013 Source: World Capital City Milano Roma Roma Milano Roma Milano Venezia Venezia Milano Venezia Firenze Verona Firenze Verona Cortina Roma Firenze Portofino Milano Firenze Firenze Roma Porto Cervo Verona Portofino Firenze Torino Torino Venezia Roma Torino Porto Cervo Palermo Bologna Bari Palermo Milano High-Street Via Monte Napoleone Via Dei Condotti Via Del Corso Via Della Spiga Piazza Di Spagna Corso Vittorio Emanuele Piazza San Marco Via Merceria Via Dante Via Xxii Marzo Via Calzaiuoli Via Mazzini Via Roma Via Cappello Corso Italia Via Del Babuino Via Strozzi Piazza Martiri Dell'olivetta Via Torino Via Tornabuoni Piazza Degli Antinori Via Borgognona Piazzetta Corso Porta Borsari Via Calata Marconi Via Calimala Via Roma Via La Grange Via Frezzeria Via Cola Di Rienzo P. San Carlo Via La Passeggiata Via Libertà Galleria Cavour Via Sparano Via Ruggero Settimo Corso Buenos Aires 0 1000 2000 3000 4000 5000 6000 7000 27
Yiled- Milan and Rome % 2013 Source: World Capital 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 guarantee 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 competitive edge. Investing in such areas has therefore become a must for international operators. 9,000 8,000 7,000 6,000 5,000 3,000 I SEM II SEM I SEM II SEM I SEM II SEM 2011 2011 2012 2012 2013 2013 28
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Consumer confidence I semester 2013 - II semester 2013 Source: ISAE - ISTAT (Italian National Institute of Statistics) 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 49,8 59,70 50,70 40,50 44,30 17,00 26 8,20 48,50 2,70-18,1-1,00-8 - 4,00-24,00-5,00-27 -7,00-26,00-11,00-8,00-12,00 8,20 115,00 121,00 113,90 114,30 110,00 113,00 109,00 104,00 107,62 110,54 105,00 99,00 102,30 108,20 98,00 91,40 85,81 83,51 84,60 81,20 72,36 76,23 71,00-30,00-10,00 10,00 30,00 50,00 70,00 90,00 110,00 130,00 30
Consumption Trends - Italy II semester 2013 Source: ISTAT (Italian National Institute of Statistics) Consumer Expenditure 204500 214000 203500 203000 202500 202000 Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 2015 115 110 105 100 95 Consumer Confidence 90 85 Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 2015 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 Consequence 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 Why invest in Italian 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 strategic 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 building products to last for a long period of time while keeping flexibility 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; 32
Types of industrial and logistic spaces in Italy Production plants Logistic Ports / Airports Freight villages logistic hubs Logistic location The nature of manufacturing practices has always influenced logistics in Italy. Traditionally, manufacturers 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. 33
European 3PL Warehouse Map m 2 Warehouse Capacity Listed 2013 Source: World Capital elaboration on data from Eye For Transport < 15,000 15,000-50,000 50,000-100,000 100,000-250,000 250,000-1,000,000 1,000,000 < 34
Lease Trends - Europe Prime Logistic Locations /m 2 pa II semester 2013 Source: World Capital 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. Oslo Zurich London Moscow Stockholm St. Petersburg Amsterdam Monaco Tel Aviv Paris Frankfurt Glasgow Barcelona Istanbul Manchester Dublin Madrid Kiev Rotterdam Berlin Warsaw Vienna line Athens Brusseles Milan Rome Prague Bucharest 20,00 40,00 60,00 80,00 100,00 120,00 140,00 160,00 35
Market Dynamics - Italian Prime Logistic Locations Source: World Capital Trento Udine Bergamo Novara Venezia Milan Verona Padova Torino Piacenza Rovigo Rivalta Scrivia Parma Genova Bologna Livorno Prato Firenze Rimini Perugia STAGNANT STABLE MODERATE DYNAMIC Civitavecchia Rome Pescara Sassari Olbia Caserta Nola Naples Potenza Bari Lecce Cagliari Gioia Tauro Palermo Catania 36
Lease Ranges - Italian Prime Logistic Locations /m 2 pa II semester 2013 Source: World Capital MIN MAX Location 45 40 35 30 25 65 60 55 50 35 41 36 46 43 53 32 40 42 52 38 46 38 42 40 50 53 63 38 46 38 48 40 50 44 56 40 46 41 50 37 46 36 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 NOVARA TORINO MILANO PIACENZA PADOVA VERONA PARMA BOLOGNA GENOVA RIMINI BERGAMO TRENTO VENEZIA UDINE LIVORNO RIVALTA SCRIVIA ROVIGO FIRENZE PERUGIA PESCARA ROMA CIVITAVECCHIA PRATO BARI NAPOLI LECCE NOLA CASERTA POTENZA GIOIA TAURO SASSARI OLBIA CAGLIARI CATANIA PALERMO 37
Italian Publicly Subsidised Freight Villages 2013 Source: World Capital elaboration on data from Unione Interporti riuniti (UIR) 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 investment. 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 different areas from those already mentioned here. They are mostly characterized by mono-tenancy and share with freight villages a strong investment appeal. CePIM - Interporto di Parma Polo Logistico di Mortara CIM Novara Interporto di Rivalta Scrivia Interporto Quadrante Europa Interporto di Trento Interporto di Padova Interporto di Cervignano del Friuli Trento Cervignano Portogruaro Interporto Orbassano Novara Mortara Verona Padova Venezia Portogruaro Interporto di Venezia Rivalta Scrivia Parma Rovigo Bologna Interporto di Rovigo Interporto di Bologna SITo di Torino Vado Ligure Livorno Prato Lesi Interporto delle Marche Interporto d Abruzzo Interporto di Vado Interporto Amerigo Vespucci Civitavecchia Pescara Interporto Campano Interporto Regionale della Puglia Interporto della Toscana Centrale Frosinone Interporto di Civitavecchia Interporto Sud Europa Olbia Marcianise Nola Bari Taranto Brindisi Cagliari Gioa Tauro Catania 38