Milan

World Capital Group: Milan Office Market Analysis – Q3 2024

By Columbus International,6 November 2024

World Capital Group has released an in-depth analysis of Milan’s commercial real estate market for the third quarter of 2024, reaffirming the preeminence of the City Center and Garibaldi districts in Italy’s prime office sector.

Market Overview
The Milan office market demonstrates exceptional resilience, characterized by sustained rental rates across both metropolitan and suburban locations. The REAI_O (Real Estate Attractiveness Index Office) substantiates this robust performance, underscoring Milan’s increasing appeal to institutional investors.

Rental Rates and Investment Yields
The historic core, particularly the Duomo district, commands premium rents ranging from €570 to €730 per square meter annually. Investment yields in central locations average 4.3%, with the Business District achieving a compressed yield of 4.2%. Semi-peripheral areas exhibit more attractive yields, peaking at 7% in emerging submarkets such as Città Studi, Pasteur, Rovereto, and NoLo.

REAI_O: Advanced Market Analytics
The sophisticated REAI_O index, engineered to quantify district-specific market attractiveness, incorporates key performance indicators:

Rental values
Capital values
Investment yields
Market fundamentals
Sector-specific metrics

Submarket Performance
The REAI_O index highlights exceptional performance across key submarkets: Prime Central Business District:

Duomo: 127.31
Centrale/Repubblica: 100.48
Garibaldi/Moscova/Porta Nuova: 96.23

Greater Metropolitan Area:

Assago: 7.17
Segrate: 5.39
San Donato Milanese: 5.29

The metropolitan area’s robust economic fundamentals continue to drive growth in peripheral submarkets, reinforcing Milan’s status as Italy’s premier commercial real estate destination.

Market Outlook
Marco Clerici, Head of Research & Advisory at World Capital Group, observes: “Milan consistently reinforces its position as the epicenter of Italy’s commercial real estate sector. The city’s proven ability to attract domestic and international occupiers, coupled with its dynamic urban transformation, establishes it as a benchmark for European commercial centers. Our Q3 2024 findings demonstrate how Milan’s strategic development initiatives and enhanced market fundamentals sustain its competitive advantage both nationally and within the broader European context.”

Source: Monitor Immobiliare

Milan’s Luxury Real Estate Market Reaches New Heights Despite Supply Constraints

By Columbus International,30 October 2024

Based on the latest Exclusive Residences Observatory by Tirelli & Partners, Milan’s luxury real estate sector is exhibiting exceptional resilience. The prestigious Quadrilatero district has achieved unprecedented valuations, reaching €37,000 per square meter in 2024—representing a remarkable 40% appreciation since 2020. This trajectory has solidified Milan’s position as a premier destination for global real estate investment.

From our vantage point at Columbus International—a boutique real estate firm strategically located at Via San Raffaele 1, 20121, Milan—we’ve identified a clear bifurcation in Milan’s luxury market: The ultra-premium sector (above €6 million) maintains robust performance, propelled by international investors and returning Italian expatriates leveraging favorable tax incentives. Meanwhile, the €1-3 million segment demonstrates more conservative growth patterns.

Market Dynamics The premium segment (€3+ million) and ultra-luxury tier (€6+ million) continue attracting substantial interest, predominantly from tax-advantaged international buyers. Supply constraints and stringent quality requirements pose ongoing challenges, though premium properties consistently secure motivated buyers swiftly with minimal price negotiation.

Entry-level luxury (€1-2 million) and mid-tier segments (€2-3 million) reflect more measured domestic demand, characterized by upgrade-oriented rather than expansionary purchases. An increasing quality differential between new developments and existing inventory has emerged, with contemporary technological amenities and architectural innovations diminishing the competitiveness of legacy properties.

Key Performance Metrics

Market absorption rates declined 3.5%, most notably in prime locations like Brera, where quality inventory remains scarce
Sales cycles now exceed 6 months—a threshold unseen in four years
Price negotiations average 6.7%, though premium properties frequently command full asking prices
The Quadrilatero leads value appreciation, while peripheral areas such as Magenta register modest 1% gains

Market Outlook The entry-level luxury segment anticipates stable transaction volume, potentially catalyzed by favorable interest rates and robust equity markets. The ultra-luxury segment is positioned for continued growth, driven by international demand and Milan’s enduring tax advantages, despite recent flat tax modifications.

Columbus International’s strategic position bridging Italian and American real estate markets enables us to serve both international investors and local clientele seeking premium properties. We welcome interested parties to our offices at Via San Raffaele 1, where our expert team provides comprehensive insights into Milan’s evolving luxury real estate landscape.

La Lombardia è la regione con più transazioni in Italia

Real Estate Boom: Milan Leads Italy’s Property Market Surge

By Columbus International,2 October 2024

In a striking display of resilience, Italy’s northern real estate market continues to defy economic headwinds, with Milan and Monza emerging as frontrunners in property value appreciation. The latest data from the Chamber of Commerce of Milan, Monza, and Lodi reveals a robust growth trajectory, particularly in these key urban centers, despite a concurrent slowdown in transaction volumes.

Milan: The Unstoppable Metropolis

Milan, Italy’s financial and fashion capital, maintains its allure for property investors, recording a 2% increase in residential real estate prices during the first half of 2024. This uptick brings the average price per square meter to a substantial €6,520, reinforcing the city’s status as a prime real estate market in Europe.

The city’s southern district has emerged as the hotspot for growth, experiencing a remarkable 6% surge in property values. This trend underscores the evolving dynamics of Milan’s urban landscape, with previously overlooked areas now capturing investor interest.

Monza: The Dark Horse of Italian Real Estate

In a surprising turn of events, Monza has outpaced its more famous neighbor, posting an impressive 7% growth in property prices. With average values now reaching €3,444 per square meter, Monza is rapidly positioning itself as an attractive alternative for investors priced out of Milan’s premium market.

The city’s northern sector has been particularly dynamic, with prices soaring by 9% to reach an average of €3,869 per square meter. This surge indicates a growing recognition of Monza’s potential as a residential and investment destination.

Market Challenges and Future Outlook

Despite the positive price trends, both Milan and Monza face headwinds in terms of transaction volumes. Milan witnessed a 13% decline in residential property transactions in the first quarter of 2024 compared to the previous year, with similar trends observed in Monza and Lodi.

Guido Bardelli, Milan’s Housing Councilor, acknowledges the pressing need to address affordability concerns. “Milan’s attractiveness now poses a challenge: ensuring housing accessibility for the middle class struggling with current market costs,” Bardelli states, highlighting the city’s commitment to expanding social housing initiatives.

Investment Implications

For investors, the current market dynamics present both opportunities and challenges. The continued price appreciation in prime locations suggests potential for capital gains, particularly in emerging areas like Milan’s southern district or Monza’s northern sector. However, the decline in transaction volumes signals a need for cautious strategy, with a focus on long-term value rather than quick turnovers.

As Italy’s northern real estate market navigates through these complex trends, it remains a beacon of growth in Europe’s property landscape. With strategic policy interventions and innovative development approaches, cities like Milan and Monza are poised to maintain their appeal, balancing growth with accessibility in the years to come.

Milan’s Real Estate Market Faces Challenges Amidst Italy’s Property Rebound

By Columbus International,15 September 2024

In a surprising turn of events, Italy’s real estate market is showing signs of life after six consecutive quarters of decline. However, Milan, the country’s financial powerhouse, finds itself swimming against the tide. According to recent data from the Italian Revenue Agency (Agenzia delle Entrate), the national property market has experienced a modest 1.2% growth compared to the same period in 2023, with 186,324 transactions recorded in the second quarter of 2024.

National Trends vs. Milan’s Anomaly

While cities like Rome (+3.4%) and Genoa (+3.9%) are leading the charge in this nascent recovery, Milan has registered a significant 7.3% drop in property transactions. This stark contrast raises questions about the factors influencing the Lombard capital’s real estate landscape.

The Milan Paradox

Milan’s declining property sales come with an interesting twist. Long-term rental agreements in the city have seen a 1% increase, while agreements under controlled rent schemes have skyrocketed by an astounding 153%. However, it’s crucial to note that this percentage represents a relatively small number—only 948 contracts were signed under these terms during the quarter.

Shifting Preferences in Property Types

Across Italy, including Milan, there’s a noticeable trend in the types of properties changing hands. Two-bedroom apartments and larger units are seeing increased demand. Industry experts attribute this to two distinct buyer groups:

Investors and young couples/singles opting for compact, two-bedroom units
Families seeking larger spaces to accommodate evolving lifestyle needs, including home offices and multi-functional areas

Economic Factors at Play

The broader Italian market’s recovery is being fueled by several economic factors:

Inflation has nearly reached the European Central Bank’s 2% target
Interest rates are on a gradual downward trajectory
71% of purchases were made using “first-home” tax benefits, a 7% increase from the previous year
41% of transactions involved mortgage financing

Regional Variations

The national uptick isn’t uniform across all regions. Smaller municipalities are outperforming larger cities with a 1.6% increase in transactions, compared to just 0.2% in provincial capitals. This suggests a potential shift in preferences towards suburban or rural living.

Looking Ahead

Despite Milan’s current slump, many real estate professionals remain cautiously optimistic about the market’s future. The stabilizing economic indicators and the pent-up demand for housing suggest that the second half of 2024 could bring more positive developments for Italy’s property sector, including its fashion and finance capital.

As Milan navigates these challenging waters, investors and potential homebuyers would do well to keep a close eye on how the city’s unique market dynamics evolve in response to broader national trends.

Source: Sky Tg24

Milan’s Green Revolution: Bosconavigli Brings the Forest to the City

By Columbus International,1 August 20241 August 2024

In the heart of Milan’s historic San Cristoforo neighborhood, a groundbreaking residential complex is redefining urban living. Bosconavigli, designed by the renowned Stefano Boeri Architetti in collaboration with Arassociati and AG&P greenscape, is not just another apartment building – it’s a vertical forest that bridges the gap between city life and nature.

This innovative project reimagines the traditional Lombard courtyard house, spiraling upwards to create a harmonious blend of architecture and greenery. With 170 trees of 60 different species adorning its facades, roofs, and balconies, Bosconavigli is a testament to sustainable urban development. But Bosconavigli is more than just a pretty face.

The complex offers 90 apartments, each designed with large outdoor spaces that serve as “outdoor rooms,” blurring the line between interior and exterior living. Public amenities, including a restaurant-bistro and wellness facilities, make it a true community hub. The project’s commitment to sustainability goes beyond its lush greenery. Solar panels, rainwater harvesting, and geothermal energy production are just a few of the eco-friendly features integrated into the design. Moreover, the building’s green elements act as natural barriers against noise and air pollution, enhancing the quality of life for residents. Bosconavigli isn’t just changing the skyline of Milan – it’s changing the way we think about urban living. As cities worldwide grapple with environmental challenges, this project offers a glimpse into a greener, more sustainable future where nature and architecture coexist in perfect harmony.

Photo via Bosconavigli

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CityLife Milan: Redefining Urban Living in the Heart of Italy’s Fashion Capital

By Columbus International,22 July 202422 July 2024

In the bustling metropolis of Milan, a revolutionary urban development is reshaping the city’s skyline and redefining the concept of modern living. CityLife Milan, an ambitious project spanning an impressive 366,000 square meters, is setting new standards in urban planning and architectural innovation.

The Future of Urban Development

At its core, CityLife Milan represents a bold vision for the future of urban spaces. This meticulously planned development seamlessly blends public and private sectors, creating a harmonious ecosystem that caters to both residents and businesses. The project’s innovative approach challenges traditional city planning norms, offering a glimpse into the future of urban living.

A Skyline Transformed

The development’s crown jewels are three towering commercial structures that dominate the Milan skyline. These architectural marvels serve as more than just office spaces; they are the heartbeat of CityLife, around which the entire project revolves. Their striking designs not only symbolize modernity but also act as a beacon for Milan’s economic ambitions.

Redefining Residential Living

Surrounding these commercial giants are clusters of residential buildings that redefine luxury living. These homes are not mere afterthoughts but integral components of the CityLife vision. Each residential complex is a testament to contemporary design, offering residents a unique living experience that seamlessly integrates with the development’s commercial and public spaces.

Green Spaces: The Lungs of CityLife

In a refreshing departure from typical urban developments, CityLife Milan places significant emphasis on public green spaces. These areas are not just aesthetic additions but are crucial to the project’s holistic approach to urban living. Lush parks and carefully landscaped gardens serve as communal retreats, offering residents and visitors a much-needed escape from city life.

The Economic Implications

CityLife Milan is more than just an architectural feat; it’s a strategic investment in Milan’s future. The project is poised to attract international businesses, boosting the city’s already formidable economic status. Moreover, it’s likely to spark a real estate boom in surrounding areas, potentially reshaping Milan’s property market.

A Model for Future Cities

As urban populations continue to grow globally, developments like CityLife Milan offer valuable insights into sustainable urban planning. Its integrated approach to combining commercial, residential, and public spaces could serve as a blueprint for future city developments worldwide.

The Bottom Line

CityLife Milan represents a bold step into the future of urban development. By reimagining the relationship between commercial spaces, residential areas, and public domains, it sets a new standard for city planning. As the project continues to evolve, it will undoubtedly cement Milan’s position as a leader in innovative urban design and sustainable living.

For investors and urban planners alike, CityLife Milan is a project to watch closely. It may well be the harbinger of a new era in urban development, one that prioritizes holistic living experiences over mere functionality. As cities worldwide grapple with the challenges of urbanization, CityLife Milan stands as a shining example of what’s possible when vision meets execution in the realm of urban planning.

Photo via City-Life

Luxury Real Estate Market in Italy: Trends and Prices

By Columbus International,17 July 2024

The luxury real estate landscape in Italy shows a significant concentration in major cities, with Milan and Rome at the forefront. According to a recent analysis by Immobiliare.it, these two metropolises account for over a quarter of the country’s high-end property offerings.

Milan emerges as the undisputed leader, with about 16% of the national luxury stock, a trend that has been growing in recent years. Rome follows with nearly 11%, but shows signs of contraction. Florence, while ranking third, represents only 3% of the total offer.

At the regional level, Lombardy and Tuscany dominate the market, with 29% and 22.4% of high-end offerings respectively. Lazio ranks third with 14.8%.

Tourist destinations play a key role in the luxury segment. Como has seen an increase in offerings, while destinations like Forte dei Marmi have experienced a decline.

In terms of prices, Portofino stands out as the most expensive municipality, with an average of 19,074 euros/sqm. It’s followed by Villasimius in Sardinia and Capri. Tourist destinations generally surpass large urban centers in terms of cost per square meter.

Among regions, Valle d’Aosta leads the ranking with average prices of 9,173 euros/sqm, followed by Sardinia and Campania. Lombardy, despite its strong presence of luxury properties, ranks only fifth in terms of average prices.

This analysis highlights a dynamic and geographically diverse luxury market, with a clear preference for coastal and tourist locations in terms of property valuations.

Source: Monitor Immobiliare

Italy, Real Estate Market Evolution: A New Era of Opportunities for Buyers

By Columbus International,11 July 2024

The real estate sector is undergoing a significant transformation, ushering in a new era of opportunities for prospective homeowners and investors alike. Recent data from the Italian Revenue Agency reveals a market rebalancing that is fostering greater price flexibility and buyer-friendly conditions.

Fabiana Megliola, head of the Tecnocasa Group Research Office, reports an increase in the average discount to 8.3%, marking a shift from the recent period of intense market activity to a more reflective phase. This transition is creating a fertile ground for buyers to negotiate more favorable terms and secure better value for their investments.

A closer look at different property categories unveils intriguing market dynamics:

Used Properties: With an average discount of 8.5%, these offer the most room for negotiation. This presents an excellent opportunity for buyers to acquire properties at competitive prices and invest in custom renovations, potentially increasing long-term value.
Renovated Homes: Offering a 7.5% discount, these properties strike a balance between move-in readiness and value for money.
New Constructions: At a 4.5% discount, these remain attractive for those seeking modern, ready-to-use living spaces with minimal immediate maintenance needs.

Investors stand to benefit significantly in the current market, with discounts of up to 12% on investment properties. This trend could stimulate the rental market and provide more housing options in urban areas.

The market is also becoming more attuned to diverse buyer preferences. Ground floor apartments now come with more substantial discounts (8.5%), catering to those prioritizing accessibility or outdoor space. Top floor units, with a 7.7% discount, continue to appeal to buyers seeking views or added privacy.

While sales have slowed in the first quarter of 2024, this should be viewed as a market normalization rather than a downturn. This cooling period allows buyers more time to conduct due diligence, evaluate multiple options, and negotiate optimal terms.

In conclusion, the Italian real estate market is evolving towards a more balanced and sustainable model. The current landscape offers a unique confluence of factors – price flexibility, diverse property options, and a buyer-friendly environment – making it an opportune time for both personal home purchases and strategic property investments. As the market continues to adapt, it promises to better align with the changing needs and preferences of a new generation of property owners and investors.

Source: Il Sole 24 Ore

Milan: Real Estate Market Evolves Amidst Stability and Growth

By Columbus International,5 July 2024

Milan’s real estate market continues to demonstrate remarkable resilience, with contrasting dynamics between the sales and rental sectors. According to the latest report from idealista’s Research Department, Italy’s leading real estate portal, housing prices in the Lombard capital have stabilized in the spring quarter of 2024, settling at an average of €4,987/m².

Key points:

Stability in Milan’s sales prices (+1.4% year-on-year)
Continued growth in rental rates
Variable dynamics across different neighborhoods

Market analysis:

The Historic Center remains the most expensive area at €10,311/m²
San Siro-Trenno-Figino leads quarterly increases (+3.3%)
Vialba-Gallaratese records the most significant decline (-4.8%)

In the hinterland, a slightly negative trend is observed, with a 1.2% decrease and an average of €3,389/m². Assago emerges as the most expensive municipality (€3,647/m²), while Grezzago offers the most accessible prices (€1,054/m²).

The rental market, on the other hand, continues its upward trajectory. A 55-square-meter apartment in the heart of Milan now costs an average of €1,760 per month, highlighting increasing pressure on the rental market.

Andrea Napoli, CEO of Locare, offers insight: “The lack of adequate protections is pushing landlords towards short-term rentals, drastically reducing the supply for long-term residents.”

Key factors influencing this trend:

High purchase prices
Interest rates that remain elevated
Growing demand for tourist rentals

The future of Milan’s real estate market remains uncertain, but it’s clear that the city is undergoing a transformation phase, presenting both opportunities and challenges for investors and residents alike.

Real estate investments in Milan. An in-depth market analysis and numerous tips from Corriere della Sera

By Columbus International,27 June 202427 June 2024

In an ever-evolving real estate market, Milan continues to be one of the most attractive locations for investors. A recent study reveals that about 20% of real estate transactions in the Lombard capital are aimed at generating income. But how truly profitable is investing in Milan’s brick and mortar? Il Corriere della Sera has conducted a detailed analysis to shed light on this trend.

Comparing Returns: Real Estate vs. Government Bonds

To assess the actual profitability of real estate investments, we compared Milan’s rental yields with those of 8-year Italian Government Bonds (BTPs), currently at 3.2% net. Our analysis is based on standard 8-year free-market rental contracts, assuming a reliable tenant and regular payments.

The Milan Landscape: Data and Figures

Based on data provided by immobiliare.it, we examined a typical 70 m² apartment:

Average purchase price: €378,000
Monthly rent: €1,631
Gross yield: 5.17%
Net yield: 3.36%

It’s important to note that the net yield, considering taxes and expenses, is only slightly higher than that of BTPs, but carries significantly greater risks.

The Geography of Returns

Our research highlighted considerable disparities between different areas of Milan:

Historic center: 2.3% net yield
Premium areas (> €350,000 for 70 m²): yields lower than BTPs
Peripheral areas like Baggio and Ponte Lambro: yields up to 4.6% net

Milan’s Hinterland: An Interesting Alternative?

Extending the analysis to the province, surprising data emerges:

Average yield: 6.8% gross, 4.4% net
Top 3 for monthly rents: Gorgonzola (€1,156), Vimodrone (€1,084), Segrate (€1,075)
Municipalities with the best yields: Turibigo, Truccazzano, Tribiano (> 6% net)

These data suggest that the hinterland could offer more profitable investment opportunities compared to the city center.

Short-Term Rentals: The New Frontier?

The short-term rental phenomenon is gaining ground, promising higher gross returns. However, management costs, taxes, and platform commissions significantly erode margins. The profitability of this model seems to be limited mainly to specific areas of Milan.

Conclusions for Investors

Real estate investment in Milan can still offer interesting returns, but it requires careful risk assessment and deep knowledge of the local market. Investors should consider:

Location as a key factor for profitability
The potential for capital appreciation in developing areas
Management and maintenance costs, especially for short-term rentals
The financial stability of tenants for long-term rentals

In a market characterized by high prices and compressed yields, due diligence and a well-thought-out strategy are more crucial than ever for real estate investors in Milan.

Source: Corriere della Sera