Italian logistics market set to outpace economic headwinds

Logistics is the second main asset class after offices in the Italian real estate capital markets and 2022 is likely to have been a record year with more than 2.2 million sq m changing hands according to Garbe country head Italy, managing director Marco Grassidonio.

That means more than 10% of the existing stock has been traded, a higher proportion if only the institutional, Grade A segment is considered.

Grassidonio explained to Real Asset Insight’s Richard Betts that the Italian logistics market is currently subject to two opposing waves. One is the macroeconomic wave that is bringing recession, higher interest rates, and more costly financing and construction costs, with yields also moving up. The other, contrary wave brings a strong tenant market with increasing demand for scarce new product that is pushing rents up faster than inflation. “We have rents increasing up to 20% whereas we have inflation of 11.8%,” Grassidonio said.

“Basically these two waves that are contrary, on the one hand give us hope for new opportunities evolving on the development side but also good opportunities for core investors.”

Please click on the video above to watch the full interview or listen to the podcast below.