Despite a decline in investments in the real estate market which, according to recent CBRE data, should amount to 5.3 billion euros in the first nine months of 2020 (-15% compared to 6.3 billion euros in 3Q 2019), from January to September Italian investors increased their share allocated to the real estate asset class by 10%. However, retail is suffering as well as offices that will have to deal with a greater use of remote work and with a request for this type of space that could lose appeal. This is what emerged from the ninth edition of the “COIMA Real Estate Forum”, an annual event dedicated to analyzing and investigating the trends of the Italian real estate market and economic scenarios, which was held yesterday in Rome. The Forum hosted over 500 industry operators in streaming, representing about 60 primary Italian and international institutional investors from Asia, America, Canada, the Middle East, Europe and Italy, for a total assets of over two trillion euros.
Looking at the overall investments of Italian investors, in the first nine months of the year, the share of Italian capital grew by 10%, going from 30% of the pie to 40%. Foreign investors thus stopped at 60% of the total, from 70% in the same period last year. Overall volumes, however, fell from € 6.3 billion to € 5.3 billion (-15%). Retail declined (from 1.7 to 0.5 billion) with offices which instead grew from 2.5 to 2.7 billion.
Smart working and offices
The forum questioned the future of the office sector. During the course of the work, the COIMA report «The future of the offices» was illustrated, from which it emerged that remote work will become a more structural component of the company organization, albeit with different degrees depending on the sector. A possible medium-term scenario could see the adoption of remote work in Italy grow from the current level of 5% to a level of 30-40% (i.e. a percentage double compared to the European average of 17% and in line with the current level of adoption of the Nordic countries).
In conclusion, COIMA believes that the COVID-19 crisis will accelerate the trend to develop resilient, holistic and high-quality neighborhoods designed with measurable ESG criteria and that these “qualified” neighborhoods will attract demand from tenants who will become more sensitive to a wider range of features instead of being focused primarily on the price factor.
In the medium term, qualified neighborhoods will continue to enjoy healthy tenant interest, while, on the other hand, undifferentiated neighborhoods will most likely face greater difficulties with a portion of their office stock that could risk losing attractiveness and in some cases even require public subsidies in order to be economically converted into other uses.
COIMA City Lab’s vision for the future of cities
Cities should be organized according to the concept of “hyper proximity” and follow a polycentric model of complex urban neighborhoods: the City Lab believes it is necessary to rethink the relationship between housing density and the functional mix of urban areas, in order to offer more neighborhood services for fewer inhabitants and to rethink the ground floors with services, shared workspaces, commercial or semi-public activities.
An agenda for Italian cities and territories
The COIMA Real Estate Forum also highlighted the great potential that our country has in applying the Recovery and Resilience National Plan to the regeneration and redevelopment of cities and neighborhoods, according to three priority guidelines – ecological transition, social and territorial inclusion and modernization of the country – which aim at six objectives: green revolution and incentive for eco-sustainable mobility, greater social equality, with a more equitable access to education, social and health services and welfare, therefore digitization, innovation and competitiveness.
The Recovery Fund can start a virtuous circle in this regeneration process: it will be necessary to apply resilience and environmental protection in a systematic way; implement future-proof clean technologies and accelerate the development and use of renewable resources; develop the digitization of the administrative, health and education system with the effort of local administrations and strict governance; enhance broadband services for all regions and families, with fiber and 5G networks; spread the promotion of accessible and intelligent transport (electric and hydrogen only), as well as an extension of public transport; therefore improve the energy efficiency of public and private buildings and eliminate those that consume too much energy.
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