Milan

Revitalizing Milan’s Southeast: MCA Unveils €3.5 Billion Milano Santa Giulia Project

By Columbus International,8 April 20248 April 2024

The new urban plan designed by MCA (Mario Cucinella Architects) has been unveiled, marking one of the largest urban regeneration projects in Italy. The central idea is to create a structure resembling a leaf, connecting services, commercial areas, schools, and residences around what aims to become Milan’s third-largest park. Present at the project’s launch were Mayor Giuseppe Sala and Urban Regeneration Assessor Giancarlo Tancredi.

Milano Santa Giulia is set to become a new gateway to the city and a neighborhood featuring residences, services, and retail spaces. It represents one of the major urban revitalization initiatives in Lombardy’s capital, focusing on the Southeast quadrant and the former industrial areas of Montedison. Total estimated investments for the project exceed €3.5 billion. Led by Lendlease, a real estate giant responsible for the area, the project will deliver 3,500 new housing units catering to various market segments, from private residences to student and senior living, to the innovative build-to-rent model. Lendlease will also oversee the development of business, food, and commercial districts. These complexes will be located adjacent to the multifunctional arena of Milano Cortina 2026 and a 260,000 square meter park. The masterplan, signed by MCA – Mario Cucinella Architects, envisions a total development of 1.1 million square meters, with completion targeted for 2032 and a strong emphasis on sustainability. Starting from June 2023, Lendlease, already engaged in the city with the Mind operation, acquired surface and development rights for the entire area, currently managed through the Msg Heartbeat real estate closed-end fund owned by Lendlease Sgr. With this acquisition, the fund becomes the effective promoter of the regeneration of the Northern Area.

Of the total €3.5 billion, €2.7 billion will be invested by the international real estate and urban regeneration group, with additional contributions from other parties, such as the Canadian pension fund PSP Investment, which invested in the Spark Business District. According to Fabrizio Zichichi, executive project director at Lendlease, this investment marks a significant step forward for the city, as highlighted by Mayor Beppe Sala during an event emphasizing the importance of developing Milan’s Southeast quadrant in the coming years. Milano Santa Giulia benefits from its privileged location, with access to Linate Airport, the ring road and highway system, the high-speed FS station at Rogoredo, and metro lines M3 and M4, surrounded by natural areas on the outskirts of the city. The new neighborhood aims to attract over 10 million visitors annually, including residents, students, event spectators at the Arena, athletes, and workers. It will be divided into two main zones, North and South, connected by pedestrian and cycling paths, public transport, and a promenade. The North zone will host commercial spaces and sports and recreational services near the multifunctional Eventim Arena, home to the 2026 Olympic Games.

Residences in the area will focus on the concept of sustainable living. The South zone will feature the Spark Business District, with offices and residences, as well as cultural institutions like the Conservatory of Music and the Spark Food District, dedicated to food and beverage. Manager Zichichi announced the imminent launch of the “Who we are Msg” campaign, which will activate the neighborhood with social, cultural, and sports initiatives, in preparation for the Olympics and beyond.

Image via Lendlease

The LEGO Group and Percassi redefine Milan’s real estate space

By Columbus International,28 March 2024

The Italian real estate landscape is destined for a vigorous evolution, catalyzed by the strategic alliance between the LEGO Group and Percassi, poised to inaugurate their latest endeavor in the heart of Milan.

March 29 marks an unmissable moment with the opening of the 26th LEGO Certified Store, located at Via Dante 4, an enchanting oasis of creativity embraced by the vibrant city center. The inauguration will be anchored by an unprecedented event: facing the store, in Piazza Cordusio, stands a monumental LEGO egg, 4 meters tall and weighing 1,200 kg, a captivating installation destined to enchant passersby. Matteo Morandi, CEO of Percassi Retail, shares the enthusiasm for this adventure, emphasizing the importance of positioning this iconic store in the pulsating heart of Milan, renowned as “the new street of Milan”, destined to become a beacon of creativity for all LEGO enthusiasts. Rossana Mastrosimini, Channel Director LEGO Certified Stores West Europe, reinforces this enthusiasm, celebrating the expansion of LEGO’s presence in Italy and the continuous innovation in the retail concept.

The new flagship store skillfully combines digital and physical elements, offering an ‘immersive’ experience that will enchant both young and old alike. As Milan prepares to welcome this new entry into retail, attention on the real estate market remains lively, especially in the context of a 40% decline in mortgages. However, the luxury segment of the real estate shines as a beacon of stability amidst uncertainties, representing only a small fraction of the total market but significantly contributing to its overall value. According to the Observatory of the Luxury Real Estate Market in Italy 2023, Milan excels as the gravity center for the luxury segment, with a stock of over 6 billion euros, representing 13% of the national total. This data remains surprising considering the solidity and consistency of the sector, with 99% of the stock composed of apartments, reflecting constant demand and sustained growth.

This upward trend has not escaped the LEGO giant, which in 2022 has already made its triumphant entry into Florence, converting spaces previously occupied by the Disney store.

In collaboration with Percassi, this new LEGO emporium introduces unprecedented innovation: the “Mosaic Maker”. Customers now have the opportunity to create personalized portraits using only LEGO bricks, through a process that transforms a photo into a set of 4,500 pieces, making the memory tangible and unique. In a context of continuous transformation, the LEGO Group and Percassi emerge as small but great pioneers, redefining not only the retail landscape but also the real estate space, weaving an increasingly vibrant and creative urban fabric for future generations.

Image: LEGO Firenze

La Lombardia è la regione con più transazioni in Italia

Nhood’s Innovative Urban Regeneration Project Set to Transform Piazzale Loreto in Milan into Vibrant Community Hub

By Columbus International,22 March 2024

Carlo Masseroli, CEO of Nhood Italy, shares his vision regarding Piazzale Loreto, emphasizing the potential of the location and the challenges associated with generating commercial pathways in less central and more complex contexts. Speaking to Sole24Ore, Masseroli outlines the “Loc-Loreto Open Community” project, winner of the Reinventing Cities competition launched by the Municipality of Milan in 2021 and currently in the construction phase to redevelop Piazzale Loreto. Masseroli explains that the success of this initiative lies in the synergistic relationship between the public and private sectors, crucial for effective urban and real estate regeneration. Masseroli highlights the strategic importance of Piazzale Loreto in Milan, frequented by a significant number of people using the subway and by residents of the densely populated surrounding area. However, the commercial route along Corso Buenos Aires towards Piazzale Loreto is currently underdeveloped.

The goal of the project is to transform this location into a destination by engaging various market brands to start construction by May. The plan includes installing retail outlets of various sizes to meet the needs of passersby and the local community. An innovative aspect of the project is managing the square as a reference point for the area, a model absent in Milan but present in other cities. Masseroli sees this initiative not only as a local challenge but also as an opportunity to experiment and subsequently export the adopted model. Unlike past attempts with commercial districts, the project aims to create collective value greater than the sum of individual commercial activities. However, bureaucratic complexities have been an obstacle to the success of such initiatives.

The proposed model could be replicated in other underutilized squares, especially those near subway stops, to stimulate retail attractiveness and dissemination, generating added value for surrounding spaces. The project also presents an advantageous socio-economic return on investment (SROI), estimating that every euro invested generates a value of four euros. Rents for commercial spaces near Corso Buenos Aires, near Piazzale Loreto, range from 1,000 to 2,000 euros per square meter per year, and the project envisages the distribution of commercial spaces over a total area of 8,000 square meters. This model, rooted mainly in the Anglo-Saxon world, where commercial districts are privately managed, is also being implemented elsewhere. Nhood is currently implementing a similar project in Spain, confirming the international potential of this innovative urban and commercial regeneration strategy.

The effect of luxury neighborhoods on more peripheral ones: the new real estate trend in Milan

By Columbus International,21 March 2024

A recent real estate report, the “Wealth Report 2024” dedicated to Milan and curated by Knight Frank, an international network specialized in luxury property brokerage, has revealed an interesting phenomenon: the rise in real estate values in luxury neighborhoods such as Porta Nuova is directly influencing prices even in traditionally less central areas like Quarto Oggiaro. Although the report does not explicitly mention these neighborhoods, it highlights the significant impact that the strong demand from foreigners in high-end neighborhoods has had on the growth of real estate prices in Milan in recent years.

Initially, it may seem surprising, considering that the study focuses on Uhnwi, i.e., those with exceptionally high net income (generally exceeding 30 million euros), a rather exclusive buyer segment. However, both Knight Frank’s report and the Tirelli & Partner Observatory confirm that the main buyers of luxury real estate in Milan are precisely these extremely high-income individuals, many of whom are foreigners. The choice of Milan as a destination for high-level business activities in the country is well known, while those seeking a quiet place for retirement or holidays tend to prefer regions such as Tuscany or Sardinia. But what makes Milan so attractive for luxury real estate investments? Christian Dominici, a Milanese accountant, explained that in addition to its status as an important international financial center, Milan also offers a high quality of life, with a vibrant cultural scene and excellent gastronomy. From an investment perspective, Milan stands out as the only Italian city capable of guaranteeing stability in values over time. While a villa in Sardinia may not maintain its value significantly over time, a luxury property in Brera or Corso Magenta offers more concrete profit prospects in the long term. A key factor that has contributed to Milan’s attractiveness for Uhnwi is the favorable tax regime offered by Italian legislation.

Those who transfer their residence to Italy can benefit from a reduced tax of 100,000 euros per year, with an additional 25,000 euros for each additional family member, thus avoiding other taxes on foreign income in countries with which Italy has agreements against double taxation. This tax advantage has led to a significant increase in individuals, including high-level athletes, choosing Milan as their tax residence. Even foreigners with more modest incomes find it advantageous to invest in real estate in Milan thanks to the generous tax incentives offered for the renovation and energy efficiency of homes.

Population registry statistics highlight the significant presence of high-income foreign citizens in Milan, mainly from France, Germany, the United Kingdom, the United States, Switzerland, and Japan, many of whom choose to reside in the central districts of the city. These data confirm the increasingly central role of Milan in the international luxury real estate investment landscape.

Source: Corriere Milano

Rental opportunities on the rise. From Milan to Florence, it’s the perfect time to invest in Italy (Immobiliare.it)

By Columbus International,19 March 20249 November 2024

The rental costs in the main Italian cities have become so high as to exclude both individuals and families with a single income. It’s interesting to note that it’s not Milan, but Florence, that emerges as the least accessible city for those seeking a two-room apartment for rent. And this makes it a great asset if you’re looking for a secure real estate investment.

According to insights from Immobiliare.it, the proptech company affiliated with Immobiliare.it, the average monthly amount a person would need to allocate for rent – ideally not exceeding 30% of their net income – has been compared with the actual average rent demanded for a two-room apartment in major urban centers. In Florence, for instance, the average monthly rent for a two-room apartment stands at 1,066 euros, yet the average budget available for a single individual barely surpasses 480 euros. Shockingly, only 0.5% of the two-room apartments listed in the market are affordable for solo renters. Following closely is Naples, where the average monthly rent climbs to 850 euros, but given the municipality’s average income, a single person can only afford around 415 euros for rent, less than half of the required amount. Consequently, the accessibility rate falls below 1%.

Milan boasts the highest rental rates among the cities under scrutiny, with rents exceeding 1,320 euros per month for a two-room apartment, while the budget available to a single individual, at 650 euros, falls significantly short. A similar situation unfolds in Venice, where despite an average monthly rent of approximately 880 euros, a single person can only afford 430 euros, less than half of the required sum. Moreover, while in Milan only 0.8% of the two-room apartments on offer are within reach for solo renters, the situation in Venice is even direr, with no affordable options available. Single individuals face challenging rental conditions in Bari and Bologna as well. In Bari, where the rent for a two-room apartment has surged by nearly 200 euros per month over the past year, reaching 800 euros, the average salary fails to meet the required amount, hovering around 430 euros. Meanwhile, in Bologna, the average rent stands at about 925 euros per month, exceeding what a person could realistically pay by 510 euros. In Rome, there’s a glaring disparity between the rent demanded by landlords and the budget available to renters, with a gap of over 70%. Landlords request an average monthly rent of 890 euros, while the budget of a single individual barely reaches 520 euros. Verona fares slightly better, with an average monthly rent of 770 euros, aligning closer to the budget of around 480 euros that a resident can allocate for rent. In the two major Sicilian cities, Palermo and Catania, the gap between the rent demanded by landlords and the budget of single renters hovers around 45%. In both cities, the monthly rent slightly exceeds 580 euros, while renters can only afford around 400 euros. In municipalities like Turin and Genoa, where the available budget for renting a two-room apartment closely matches the rent demanded, there’s a more balanced situation. In Turin, the average monthly rent slightly exceeds 600 euros, whereas a single individual can afford around 500 euros. Similarly, in Genoa, the gap between the average monthly rent of 550 euros and the personal resources of 450 euros is narrower. Notably, Genoa remains the city with the highest accessibility to two-room apartments for single renters, with 38% of the available stock.

Antonio Intini, Chief Business Development Officer of Immobiliare.it, commented: “The analysis reveals that the rental market in our major cities offers few sustainable options for those with a single income. In most cases, single individuals must allocate at least 50% more than the considered sustainable budget for rent, if not double. Considering the potential for further rent hikes, it’s imperative to reflect on the future of our main urban centers, which are becoming increasingly inaccessible to new generations, forcing them to seek housing solutions in the outskirts and potentially weakening the socio-economic fabric of the cities.”

Source: Monitor Immobiliare

A million-dollar deal: Campari purchases headquarters in Milan from Bnp. All the latest information here (source: Sole24Ore)

By Columbus International,4 March 202411 March 2024

An operation that reinvigorates Milan’s real estate market, which has been declining since the beginning of the year. The transaction in question sees Campari as the buyer and Bnp Paribas Reim, an investment management company specializing in real estate and part of the Bnp Paribas Group, as the seller.

The real estate company has sold, on behalf of a managed real estate fund, an office building located at Corso Europa 2, a stone’s throw from Milan’s Duomo. Here, Campari will establish its headquarters. The transaction was completed for a sum of approximately 110 million euros, to which renovation costs are added. The building covers a total area of approximately 10,000 square meters, spread over nine above-ground floors and four underground floors. The building faces both Corso Europa and Via Larga. After the sale, the building will undergo renovation and modernization by the buyer, as it is currently divided into spaces previously rented to various Italian and international tenants.

Many of them have already left the building, including the Bpm branch, and soon Commerzbank and the Molteni store will follow suit. This will give rise to the new headquarters where Campari Group will move in 2027, as stated by the company. Currently, Campari’s headquarters is located in Sesto San Giovanni, in a complex designed by architect Mario Botta and inaugurated in 2009. Returning to the building on Corso Europa, it was purchased in 2016 by the real estate company of the banking group through the Fundamenta fund, paid 91 million euros at the time. The asset was sold by the Borromeo family, assisted in the operation by JLL Italia.

The Borromeo family remains active in the real estate sector also through Merope Asset Management, an investment and real estate development company founded and led by Pietro Croce, of which they hold 10%. “The sale of the asset on Corso Europa to an international and prestigious company like Campari demonstrates how Bnp Paribas Reim is able to offer high-level solutions in the active management of real estate investments,” commented Vincenzo Nocerino, CEO of Bnp Paribas Reim Italy at Sole24Ore. “It shows interest in a building with solid fundamentals and located in a strategic position in the center of Milan, the beating heart of a metropolis increasingly oriented towards Europe, essential characteristics for a property destined to host the headquarters of a large group.”

Rents Yield Like Never Before. Since 1998, Real Estate in Milan Appreciated by +130% (source: Tecnocasa Group)

By Columbus International,27 February 2024

Real estate investments are experiencing a steady increase, driven by stable returns that demonstrate gradual yet consistent growth over the years. The appreciation of property values has become a widespread trend, with double and triple-digit increases occurring in almost all regions over the past 25 years.

According to an analysis conducted by the Research Office of the Tecnocasa Group, in the first half of 2023, 19.6% of real estate transactions were made for investment purposes. This figure represents a slight increase compared to the same period the previous year, when the percentage was around 16.8%. Rising inflation is prompting more and more people to invest in bricks and mortar, traditionally considered an excellent form of investment.

The return of tourists has also contributed to revitalizing the real estate market, with an increase in purchases of properties intended for accommodation in both popular cities and tourist destinations. The analysis primarily focuses on the long-term rental market rather than seasonal rentals. The prospect of earning steady rental income induces greater caution among property owners, especially considering the current economic uncertainty and rising energy costs. However, annual rental yields remain attractive, with an average rate of around 5.2% for two-bedroom apartments of 65 square meters in major Italian cities. Among the metropolises, Genoa, Palermo, and Verona stand out for the highest yields, at 6.6%, 6.4%, and 6.3%, respectively.

Real estate investors are not only aiming for rental income but also for the growth in property value over time. In recent years, there has been a recovery in property prices, with a preference for areas characterized by the presence of universities, services, and urban redevelopment projects. Fabiana Megliola, head of the Research Office at Tecnocasa, emphasized that real estate investors are interested not only in rental returns but also and above all in the appreciation of the property value over time. Between 1998 and 2023, major Italian cities saw an average price increase of 46%. Milan recorded the highest appreciation, with an increase of 132.1%, followed by Naples with 72.1% and Florence with 71.2%.

Source: Sole24Ore

Milan Luxury Property Market: Resilient Growth Despite Global Economic Uncertainty

By Columbus International,6 February 2024

The luxury residential market in Milan is experiencing a period of changing dynamics, according to the recent Savills World Cities Prime Residential Index report. In 2024, forecasts indicate an average growth of 0.6% in luxury property prices, marking a moderate decrease compared to the +2.2% recorded in 2023. Milan emerges in the ranking, placing 13th among the top 30 global luxury residential markets. Regarding the European ranking, it rises to 4th place, a sign of the growing demand and international appeal of the Italian metropolis. “Despite concerns about rising interest rates and the consequent increased price sensitivity,” said Danilo Orlando, Head of Residential at Savills in Italy, “buyers with greater financial availability continue to purchase prime properties in Milan. There has been a surge in the luxury rental market as well. The city continues to attract global capital, thanks to its livability, lifestyle, and lower acquisition costs compared to major world capitals.”

Milan has recorded rising values over the past year, and the trend is expected to continue in 2024. The discrepancy between demand and supply of prime products and new developments continues to support more moderate price growth. On the international scene, Sydney and Dubai have the best forecasts for 2024. Both are expected to benefit from the increasing population of high-net-worth individuals (HNWIs). Sydney, with demand for luxury residences exceeding supply, could see a significant price increase of 8%-9.9%. In the case of Dubai, which already experienced a 17.4% increase in 2023, growth is expected to slow slightly in 2024. “Faced with ongoing economic uncertainty,” said Kelcie Sellers, associate at Savills World Research, “prime residential markets saw subdued changes in 2023, after two years of significant growth. It is expected that the increase will further slow down in 2024 as markets return to more normal conditions, but will remain positive.”

Despite the overall price growth, some major global cities such as Los Angeles, New York, San Francisco, Seoul, London, Singapore, and Hong Kong are projected to experience a decline in 2024. This is attributed to weakened confidence, rising interest rates, and challenging economic conditions. The uncertain macroeconomic context and prospects for higher interest rates could influence buyer and seller sentiment in the luxury residential sector in Milan. However, the prime market appears to be less susceptible to credit access difficulties compared to the overall residential market. “We expect 2024 to be an interesting year in the Milan residential market,” concludes Sellers. “The potential cut in interest rates by central banks, in mid or late 2024, could further support the market.”

Source: Il Sole 24 Ore

Skyrocketing Demand: Luxury Real Estate Surges 9% as Global Buyers Flock In

By Columbus International,5 February 2024

The transactions of luxury homes are experiencing a 9% increase, with demand surpassing supply, according to the report from the Gabetti Studies Office based on data from Santandrea Luxury Houses & Top Properties, specializing in the analysis of the prestigious real estate market. Foreign buyers represent 70%, while the remaining 30% are Italians. In most cases, the purchase is motivated by exclusive use, either as a primary residence or a second home. The average age of buyers ranges from 45 to 70 years for properties costing at least one million euros, and their maintenance can be costly. High floors and terraces are the most requested features, followed by parking spaces.

Milan stands out as the most expensive city, with prices averaging a 1.4% increase in 2023 compared to the previous year. In the Brera district, the average price per square meter exceeds 11,000 euros, while in the Quadrilatero, it stands at around 12,300 euros. In Rome, demand is increasing in the Prati and Salario-Trieste neighborhoods, with average prices for new/restructured properties around 6,000 euros per square meter. In the historic center, the average price per square meter exceeds 10,000 euros.

In Florence, the most expensive areas are central, such as the Lungarni, where a new/restructured residence costs an average of 6,200 euros per square meter. Genoa records price increases everywhere except in the Quarto/Quinto area. In Naples, prices remain essentially stable, and the number of transactions is slightly decreasing. In Turin, prices also remain stable, although the demand for purchases varies depending on the neighborhoods.

Source: Corriere della Sera

Global Real Estate Markets in Flux: New York and Milan Buck the Trend

By Columbus International,17 January 2024

The latest edition of the UBS Global Real Estate Bubble Index reveals a significant shift in housing market imbalances across major cities worldwide. According to the report, only Zurich and Tokyo retain their status as being at risk of a housing bubble, marking a substantial improvement from the previous year’s nine cities in this category.

Notably, New York and Milan stand out as cities that have experienced positive adjustments, moving towards fair valuation. The overall trend indicates a decline in housing market imbalances, attributed to the impact of global inflation and rising interest rates over the past two years. On average, real house prices in 25 major cities fell by 5% from mid-2022 to mid-2023. Despite this correction, the report suggests the possibility of further downside in prices. New York, along with Boston, San Francisco, and Madrid, has witnessed a drop in imbalances, leading to a classification of being fairly valued. Similarly, Milan, São Paulo, and Warsaw have also achieved fair valuation status. This transformation is noteworthy as it signals a departure from the bubble risk category and indicates a stabilizing real estate market.

The decline in house price growth is attributed to the substantial increase in financing costs, with average mortgage rates nearly tripling since 2021 in most markets. Annual nominal price growth in the analyzed cities stalled after a 10% rise in the previous year. In real terms, prices are now 5% lower than in mid-2022, erasing most gains made during the pandemic. The sharp drop in housing market imbalances is not solely due to falling prices but is also influenced by inflation-driven income and rental growth.

Mortgage lending growth has halved since mid-2022, leading to a decline in household debt to income, particularly in Europe. However, despite these positive shifts, the affordability of living space remains lower than pre-pandemic levels. Some cities are already witnessing the seeds of the next property price boom. Hybrid working has not significantly weakened demand for city living, and a housing shortage is anticipated as fewer building permits have been issued, especially in European urban centers. In the Americas, while Miami and New York show varying trends, New York’s housing market is on a strong comeback, with a 3% increase in real prices between mid-2022 and mid-2023. Conversely, Boston’s housing market dynamics have weakened. In Europe, Milan stands out with a 2% drop in real prices, attributed to local rental and income growth, but with solid economic prospects.