A sure sign that foreign investors are regaining confidence in the European commercial property market is seen through the growing interest in Italy, one of the weaker EMEA markets.
From January through early October ’13, the volume of Italian cross-border transactions totaled €2.75 billion ($3.71 billion), about 79% of all commercial real-estate transactions in Italy so far this year, according to Real Capital Analytics (RCA), a global research company exclusively focused on commercial real estate. “That is the largest amount of foreign investment in Italian commercial real estate since 2007, though it still is only half that year’s total,” says Joseph Kelly, EMEA Director of Market Analysis at RCA.
RCA data also shows that in Q2’13, yields in Europe’s harder-hit markets such as Italy, Spain, Portugal, Ireland and Greece were on average 7.3% for retail property and 8.4% for office property. Europe’s strongest markets, such as London, Paris, Germany and Sweden, are seeing initial yields as low as 5%. Many attribute this to the fact that these markets have largely returned to prerecession levels, causing them to become less appealing
To compare Italy with other markets in the EMEA or globally, try RCA’s TrendTrackerSM, where you can visualize and compare commercial real estate trends across countries, regions, markets, and submarkets using a single charting and data platform.
Buyers among the largest transactions in Italy in 2013 were largely those that either had never purchased property in Italy, or had not done so since the global financial crisis.
To see more details about crossborder transactions in Italy, try RCA’s Cross-Border Capital Tracker, an interactive map that allows subscribers to view capital flows around the world.