Italy’s long-running political instability is raised by many rueful Italian interviewees. But respondents also stress that Milan rises above the national travails. The “locomotive” of Italy is led by strong local government and continues to attract talent and capital from both domestic and international investors. “Milan has a different market to other cities in Italy; it plays in the European league,” says one local CEO. “The Milan Municipal Administration officials are open to dialogue and are well prepared,” adds another. “It is the only Italian city with a structured, long-term growth plan,” chimes a pan-European investment manager. The city authority is praised for its approach to urban regeneration with an emphasis on investing in public transport, bold architectural design and the value of place- making – mixing offices, services, and public spaces.
In 2023, metro Line 4 is due to start operating and is tipped to benefit fringe city spots such as the fast-growing Tortona district in the fashionable south-west where investors have been snapping up offices in anticipation of value increases. In the north arc of the city centre, the Porta Nuova development’s success is driving investment in surrounding areas including the Scali Milano former rail yards. On the north-eastern fringe, the Bicocca business and university quarter is attracting international capital for residential and student housing development as well as one of the first transactions in the city by South Korean investors. “There are good opportunities if you are able to get an office building refurbished to grade A specification. You will lease it in no time at very good rents,” reports one of many pan- European investors with projects in the city. Demand from a diverse tenant base for modern space underpins top rents of €600 per square metre per annum, which is higher than many European cities outside Italy. The city is looking forward to hosting the winter Olympic Games in 2026. “Thanks to this, there will be need of many more apartments which could be sold at the end of the international events. This will be a great opportunity for Milan,” says a local hotel and residential developer. And as the wealthiest regional economy, close to Europe’s key distribution routes, Greater Milan is the most active logistics submarket, offering prime yields of 5.3 percent – higher than many western European locations. (Content from PWC emerging trends in real estate Europe 2020)