Realcast: Logistics at a turning point, office vacancies stabilise, foreign investors target Italy

The Logistics sector in Europe is reaching a turning point, according to a new report by AEW: investment activity has set new records and yields have been driven down, but going forward investors will require higher yields. For the next five years prime total returns of 5.1% are expected across Europe, a downward revision from previous estimates, but core markets like the UK, Germany and the Netherlands are projected to maintain positive capital growth.

Despite fears about the impact of home working, in Europe office vacancy rates have stabilised at 7.2%, having not moved since Q3 2021, according to a new report by Savills. The office sector’s resilience is partly due to the shortage of new space coming to the market. Rents for prime offices are therefore expected to increase.

The hospitality sector in Italy continues to attract international investors, with two big deals announced this week. London-based investment fund Blantyre Capital has launched the Belstay brand with four hotels on the outskirts of Milan, Venice and Rome aimed at both leisure and business travellers who seek value for money. The group is planning to open 10-12 Belstay hotels in Italy by 2024.

At the luxury end of the spectrum a consortium of investors led by Bill Gates has bought historic Palazzo Marini in the centre of Rome for €170 million and plans to spend a total of €300 million to turn it into the Italian capital’s first six-star Four Seasons hotel. Several high-profile hotel brands from Marriott to Rosewood to Mandarin Oriental have recently opened in Rome as international tourists flood back following the easing of restrictions.

Italy’s climate is also attracting investors, as Canadian Solar has become the biggest player in solar parks in the country with another €90 million acquisition of assets in Sardinia and Sicily. The seller, Italian company Innovo, is planning to invest more in solar parks in the UK.

Click on the video to see the full discussion or listen to the podcast below.