Spotlight on Milan Real EstateAnna Alquati
Yesterday in Milan, Le Village – the open ecosystem that supports the growth of start-ups and accelerates the innovation of companies – hosted the “A tutta R” phygital event, organised by Credit Village and T.W.I.N. With ‘R’ standing for Real Estate, Restart, Recovery and Responsibility. The event offered some fascinating reflections on the relaunch of Milan’s real estate market which, although set back by Covid-19, has in the first half of 2021 signalled to the world that it remains the uncontested business centre and financial capital of Italy.
Milan’s investment market is incredibly active, with the city accounting for more than 30% of Italy’s yearly real estate investment volume, and a number of exciting real estate projects currently underway.
Among them is MARK’s renovation of the ex Corti di Baires building on the corner of Corso Buenos Aires and Via Enrico Petrella and Corso Buenos Aires 33-37. The mixed use development exceeded 50% leasing for the retail component in spring 2021 and 95% of sales of its residential flats, with all the negotiations conducted during the Covid-19 period. MARK’s phenomenal progress is a clear indication of the resilience of the Milanese market despite the difficulties of the last year.
Nomisma’s second 2021 Observatory project is another one to watch, emphasising the growth of Milan’s residential sector.
Carlo Giordano, managing director of Immobiliare.it comments: “The home has once again proved to be the safest haven for Italians, even in a period of economic crisis and uncertainty. The steady increase in demand for homes to buy also shows how the measures adopted to support the market have worked – renovation bonuses and mortgages with a government guarantee are leading more and more Italians to consider buying a home suited to their new needs or taking the plunge and making their first purchase.” He also added: “(…) The strong positive changes in demand (+20%) and prices (+3%) compared to last year, however, reveal that the real estate market is healthy, ready for a restart, and that compared to other sectors of the economy it has confirmed to have an excellent resilience”.
Other market indicators, such as the time it takes for properties to sell and the discounts offered during negotiations, have remained constant over the last six months. Furthermore, house prices in the city are on the rise. Milan is currently the most expensive city in Italy with its 4,831 euro/sqm and, in the first six months of 2021, prices of homes for sale increased by 2.3%. Scenari Immobiliari has predicted an impressive 12.3% growth in 2021 and a continued climb until 2023.
Milan’s urban regeneration and transformation are also driving forces in the city’s post-Covid recovery: Bosco Verticale and Piazza Gae Aulenti and two notable examples. The latter, located in the heart of Porta Nuova, is considered one of the most important urban projects in Europe, which has seen the regeneration of a central site in Milan, abandoned for more than 50 years, and the creation of a new, entirely pedestrianised area. Hines is also investing 200 million euros to revive Nodo Bovisa, a large site near the city centre of Milan, as part of the international “Reinventing Cities” regeneration competition, which will contribute to the urban transformation of Milan by 2030.
The Life Sciences sector – which few can doubt is becoming one of the hottest asset classes in global real estate – is also seeing accelerated activity in Milan. MIND, the city’s new innovative science and technology hub, is now being built in what was once the one million square metre area that hosted Expo 2015. The development is a Smart City of the future where 60-70,000 people a day will pass through when fully operational, with a total investment of €5 billion by the public and private sectors projected by 2029. By 2025 it is expected that all the public functions managed by Arexpo, and part of the private ones, managed by Lendlease, will be operational. AstraZeneca, Bio4Dreams and Rold will be the first companies to enter MIND, having already signed a lease.
The pandemic has of course caused certain setbacks for Italy’s shining capital, but with it has also come new opportunities to establish the city on the global real estate stage. The development landscape in Milan is experiencing an incredible transformation. As a Milan native and lover of Real Estate, it’s fantastic to see. With the rest of the Innesco team, I’ll be watching closely – and with excitement – as the city’s built environment continues to evolve and emerge as a world frontrunner for new initiatives and real estate projects.
Anna Alquati, Account Manager, Innesco