-29% vs 2019
In line vs 2018
-23% vs 2017
The real estate market in Italy experienced a 29% contraction in the overall investment volumes in 2020, reaching a total value of Euro 8.8 billion. The office segment saw the highest share of investment volumes, in line with what was recorded in 2019. The City of Milan continues to attract the highest share of investments, accounting for 38% of total investment volumes.
INVESTMENT VOLUMES BY ASSET TYPE
INVESTMENT VOLUMES BY CITY
INVESTMENT VOLUMES BY INVESTOR ORIGIN
The investment market for Milan offices has been relatively active in 2020, with investors focussing mainly on low-risk properties, such as buildings that have been recently renovated and are let on a longterm basis, often situated in very central areas of the city. The letting market has been slower in 2020 compared with the last few years, with corporates mainly focussing on the management of their own operations and reassessing their organizational structures.
The investment market for Milan offices has recorded volumes for Euro 2.3 billion in 2020, a 39% decline compared to the volumes registered in 2019. Valuations of “prime” office properties in Milan have seen a further increase vs 2019, with a yield compression of 20 bps in 2020.
The Milan office leasing market recorded a take of 277,000 sq m in 2020, a level 32% below the one recorded in 2019. Coherently with recent years, the demand from tenants is predominantly concentrated on Grade A properties. The headline rental levels for the various districts in Milan has remained relatively stable in 2020 vs the end of 2019.
|District||RENTAL LEVEL (DEC-20)||Trend in 2020|
|Porta Nuova / CBD||€600/sqm||stable|
|Scalo Porta Romana||€350/sqm||stable|
|San Donato Milanese||€210/sqm||stable|
|Sesto San Giovanni||€200/sqm||stable|
The year 2020 saw a modest level of completion of
office projects and the current development pipeline
under construction to be delivered in 2021-2023 is
equal to c. 217,000 sqm per annum (c. 1.7% of the
total office stock in Milan as of December 31st, 2020)
and is already 42% pre-let.
The vacancy rate in the Milan office market is at 9.8% as of December 31st, 2020, decreasing by 40 bps compared to December 31st, 2019. A similar trend is also related to the vacancy rate for Grade A offices, at a level of 2.1% of the total office stock in Milan, decreasing by 30 bps compared to December 31st, 2019.
COIMA RES is a Real Estate Investment Trust (REIT), owning a portfolio of high quality office properties in Milan. COIMA RES is the only Italian REIT predominantly focussed on the office segment. Comparable companies to COIMA RES are the other six participants to the European Think Tank, namely alstria (Germany), Castellum (Scandinavia), Colonial (Spain and France), Gecina (France), Great Portland Estates (United Kingdom) and NSI (The Netherlands). These companies are leaders in their respective markets, owning high quality portfolios of real estate asset with a large portion of those assets being for office use.
Considering that the impact of the COVID-19 crisis on COIMA RES’ business has been limited so far, COIMA RES is confirming its 2021 guidance of EPRA Earnings per share of Euro 0.49. The guidance will be updated over the course of 2021 to reflect any meaningful update, also taking into account any potential future economic impact from the COVID-19 crisis.