The Italian real estate investment market witnessed its highest quarterly volume in the past two years during Q3 2024, according to research from Dils.
Transactions totalling approximately €3 bn fuelled this growth, double the result of the same quarter in 2023, the firm said.
Year-to-date, investments have reached €6.4 bn, surpassing the total volume recorded for the entire year of 2023, which amounted to €6.2 bn. This performance is primarily attributed to the completion of a landmark transaction: the sale of a prime retail and office asset in Milan for €1.3 bn, the largest single-asset deal in the history of the Italian market.
The market also saw notable activity in the logistics sector, with two portfolio acquisitions in Milan, Rome, and Piacenza exceeding €400 mln combined.
The office market recorded its highest quarterly performance in two years. Investments totaled approximately €670 mln, bringing the year-to-date total to over €1.5 bn—a threefold increase compared to the same period in 2023. Milan and Rome dominated the third-quarter market, accounting for three-quarters of transactions. Prime net yields in these cities remained stable at 4.0% and 4.5%, respectively.
The logistics sector attracted approximately €640 mln in investments during Q3, a substantial increase compared to the previous two quarters, bringing the year-to-date total to over €1.1 bn, slightly surpassing the same period in 2023. A major transaction during the quarter involved the sale of a logistics portfolio for over €300 mln to an international core investor making its debut in the Italian market. The prime net yield for logistics remained stable at 5.5% throughout the quarter. The occupier market saw a take-up of approximately 560,000 m2 in Q3, bringing the year-to-date total to 1.7 million m2, down compared to the same period in 2023, but slightly up compared to the first half of 2024.
Retail was the top asset class for investment in the Italian market during the first three quarters of 2024, attracting a total volume of nearly €1.6 bn, of which €1.1 bn was invested in Q3 alone. The high-profile sale of the property on Via Montenapoleone in Milan accounted for a significant portion of the third-quarter investment.
Hospitality remains one of the most active investment areas, attracting over €1.2 bn in capital since the beginning of 2024—a 150% increase compared to the same period in 2023. The third quarter alone witnessed investments of approximately €440 mln. Two significant transactions highlighted the quarter, including the acquisition of a premium property portfolio in Veneto and Tuscany and the redevelopment of a historic Rome property into a luxury five-star hotel.
The living sector saw investment activity of approximately €80 mln in Q3, a 35% increase compared to the previous quarter. However, the sector remains below 2023 levels, with year-to-date investments totaling around €300 mln (a 47% decline). Recent legislative and regulatory challenges, particularly impacting Milan, have contributed to this slowdown. However, a significant pipeline of deals expected to close by the end of the year could boost investments in Q4.
The alternative investment sector captured nearly €100 mln of investments in Q4, primarily driven by transactions in the education and telecommunications sectors. Including mixed-use assets, the year-to-date investment volume has reached approximately €740 mln.
