Investment Diversification and Property in Italy

Italy’s property market is not seen by many as a place for investment diversification, rather it is considered to have an attractive if highly priced residential real estate sector that is of moderate interest, and that’s that for the majority of individual investors. 

However, when it comes to investment diversification and property in Italy there is actually much to consider and much to be said for the commercial side of things, and if Italian legislators have their way and a type of REIT comes into play in Italy later this year then the whole market could be due a welcome and positive shake up.

Looking at the commercial property market as it stands first - there is such an oversubscription for prime office space in every major Italian city that investment diversification is already essential for all those seeking space and for all those seeking an investment return. 

It is now acceptable to take on sub-prime space in sub-prime locations and it is also becoming the norm that investors take on alternative property assets and market them as office space for the hungry market!

Demand is high, demand is sustainable and therefore there is nothing to suggest that yields will be negatively impacted in the short to medium term making the office sector in Italy one worthy of due consideration…or if you’re looking for an emerging market within the commercial sector then Savills’ Italy researcher Susan Trevor-Briscoe suggests you look to retail, logistics and leisure based property assets as well.

However, wherever you look for commercial opportunity in Italy for general investment diversification you will be competing with the likes of leading Italian company Generali Property Investments which has plans to add to its impressive portfolio to the tune of 7 billion euros over the coming 3 years.  The company already has 18 billion euros in property assets under management - a great deal of which is in Italian property - and now a large percentage of this additional 7 billion euros could come Italy’s way as well making competition stiff.

At least individual investors can take heart from this and know that they are not alone in their thinking, and that while returns available from Italy’s real estate sectors are lower than those potentially available in various emerging markets around the world they are at least far more likely to be better assured.  Further good news is waiting in the wings for individual investors who really want to get in on Italy’s commercial market as part of their portfolio diversification but who are not in a position to commit substantial funds to a singular purchase commitment as well…

…there is everything to suggest that long awaited Italian REIT-type structures will come into being later this year.  Societa per Investimento Immobiliare Quotates or SIIQs as they are known are in the final planning and honing stages and as they stand they look far more attractive than traditional REIT-like structures.  The entire real estate and property investment industry in Italy is excited at the prospect of their introduction as it is predicted that the introduction of SIIQs will cause significant international investment to flood in.  It’s likely that their introduction will cause a very positive shake up with the affirmative effects of the SIIQs’ introduction likely to begin impacting the market from next year onwards.

Special Reports: Property News for Italy

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A complete buyer’s guide for property in Italy – how the property buying process works and how much it costs!

Italy and Profiting from Property for Sale
A guide to the property investment potential in Italy’s commercial and residential real estate markets for investors

Italy: Interesting Things about Italy for Property Investors
An introduction to Italy and the Italian property market