Market Size of Italy Office Real Estate Industry
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR | > 5.00 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Italy Office Real Estate Market Analysis
The size of Italy Office Real Estate Market is USD 1.5 billion in the current year and is anticipated to register a CAGR of over 5% during the forecast period. The performance of the Italian office real estate market was greatly impacted by the COVID-19 pandemic. Particularly as a result of the crisis, non-residential investment significantly decreased, and sale prices, transaction volumes, and new finance activities have all been corrected. The number of new vehicles issued, the value of their stock prices, and the value of their real estate assets were all affected. This has also affected Spanish real estate investment trusts with a focus on this industry. In contrast, the commercial real estate market's connection to credit quality has not yet experienced a significant drop.
- Strong fundamentals drove quarterly take-up of over 108,000 sqm in Milan (+26% on Q3 2021) and approximately 40,000 sqm in Rome, matching record-level YTD results in Milan with approximately 370,000 sqm.
- The pipeline for new projects is very strong in the markets of Milan and Rome. About 117,000 square meters were expected to be completed in Rome by 2022, in line with the volumes seen in 2018 and 2019; in Milan, the pipeline is expected to provide a sizeable amount of square meters. The risk of a sharp increase in vacancies in Milan as a result of new products entering the market is still low.
- Up until now, the demand for high-quality premises has caused newly built offices to be quickly occupied. The percentage of recently finished or still-being-built offices that were fully occupied in 2021 was 81%.
- The majority of the pipeline, primarily in the sub-markets that accounted for 43% of 2021 take-up volumes, appeared to be well positioned. Additionally, 38% of the floor space scheduled for delivery in 2022 was already occupied.
- The difference in rent between grade A and grade B buildings will widen as a result of the growing demand for new, high-quality products that adhere to stringent ESG criteria. Prime rents had already increased from pre-pandemic levels by the end of the year, reaching EUR 620/sq m/year (USD 659.95) in Milan and EUR 475/sq m/year (USD 505.61) in Rome.
