News / From the associates

The Yard Reaas report analyzes the Italian real estate market using 2024 data, 2025 forecasts, and a focus on the impact of the EPBD directive (or “green homes”), offering insights into Milan, Turin, Rome, and Bari.

In 2024, the Italian economy showed moderate growth amid an uncertain environment, with subdued inflation, early signs of monetary easing by the ECB, and an improving labor market, though against a backdrop of still-weak domestic demand.

The real estate market underwent a period of consolidation: after a decline in the first half of the year, the second half saw a recovery in transactions thanks to falling interest rates. Investments reached nearly €10 billion, up from 2023, with shifts toward retail and hospitality, stability in logistics, a decline in residential properties, and a less dominant role for offices, which remain central in Milan and Rome.

In the residential sector, the market stabilized with a recovery in transactions and an increase in average prices, driven by demand for three- and four-bedroom units. Sales times have shortened, and interest is growing in functional solutions and branded residences in the luxury segment.

Logistics has held up well, with 1.7 billion in investments (26% of the total). Despite a slight contraction, the sector remains resilient thanks to rising rents—+10% annually for new properties—vacancy rates at record lows (below 1.5%), and momentum from AI, automation, reshoring, and sustainability. At the same time, the data center sector is growing, driven by cloud and AI: Milan is the national hub with estimated investments exceeding 10 billion by 2026.

The office sector has shown signs of recovery with 2.2 billion in investments (25% of the total), driven by Milan (45%) and Rome (40%). Demand is concentrated on Class A properties, with lower vacancy rates in CBDs. Turin is also showing signs of a rebound, with prospects for stabilization by 2025.

Retail has experienced strong growth, thanks to stable demand, record investments, and a focus on secondary locations, outlet malls, and proximity. Via Montenapoleone recorded the most significant single real estate transaction, while cities like Bergamo and Pisa are gaining appeal due to affordable rents. Large-scale retail is also growing through sale-and-leaseback transactions, and outlet malls are exceeding expectations with positive performance.

Hospitality confirmed its key role, with 2.1 billion invested, the second-highest figure on record. Rome, Venice, and Milan remain major attractions, along with destinations such as Lake Como and Sicily. The luxury sector is growing, driven by conversions and value-added transactions, with the rise of branded residences in Italy as well. Despite the decline in domestic tourism, international arrivals have increased, supporting RevPAR and the expansion of 5-star hotels, especially in Rome.