Italy government

Italian government boosts investment boom

As you read this, Italy’s new government will unveil its plans for the coming years, with investors hoping for a continuation of the support that has bolstered volumes finding a home in commercial property.

The previous government committed €2.4 billion to the tourism sector, with a particular focus on digitization and sustainability.

Previous incumbents contributed to a 14% year-on-year increase in total commercial property investment volume to €10.4 billion, with familiar private equity firms such as Blackstone and Apollo showing enthusiasm for the country.

In our sector, these have been aided by a number of tax measures, including tax credits for commercial leases in certain circumstances and a “tax-free” revaluation for legal and tax purposes of real estate assets. held by entities engaged in hotel activities. As part of efforts to revive the country’s tourism market, some property taxes have been waived for hotel businesses, although this proved to be only temporary, following the worst of the pandemic.

The country’s attractiveness has been supported by the growing divide between hotel ownership and operation which has helped attract traditional real estate investors to the sector in other regions. The government has also tried to reduce the impact of overtourism in places like Venice, by promoting secondary sites and improving the infrastructure around them.

Italy continues to attract the luxury part of the market. More recently, Six Senses announced its debut in the country with a 96-room hotel near the Trevi Fountain

Marriott International also announced a deal with Bain Capital and Omnam Group, which will see the Lake Como edition launch in 2025. The pair will own and develop the hotel through a fund managed by investment management firm Kyralos. RMS.

“There is an incredible opportunity for hotel investment in Italy, not only in major tourist destinations like Rome and Milan, but in specific locations that have strong appeal to customers seeking high quality services and unique experiences” , said Paolo Bottelli, CEO of Kryalos SGR.

Rome is set to benefit from events such as the Ryder Cup, the European Aquatics Championships and the Expo 2030 bid, while Milan, which is undergoing a city-wide revamp, is attracting newcomers. growing attention from buyers looking for existing sites as well as development. Opportunities.

Earlier this year, Foruminvest Italia purchased a site near Milan Malpensa airport which will be managed by Accor under its Tribe brand. The deal came shortly before the French group announced the management of a Novotel and an Adagio in Milan Sesto, close to the new Sesto San Giovanni station, and the City of Health and of research.

The deals with Accor and Marriott illustrate the country’s shift from unbranded flags to global flags, aided by investment growth and the ability to split operations and ownership. According to Horwarth HTL, in 2021 the hotel chain penetration rate has increased to 5.4%. In terms of hotel rooms, this rate recorded a slight growth of 1.6%, reaching more than 17.2% of the total Italian park.

The WTTC reported that before the pandemic, when travel and tourism were at their peak, Italy’s total contribution to GDP was 10.6%.

The organization predicts that the travel and tourism sector will experience an average annual growth of 2.5% over the next 10 years, five times the growth rate of 0.5% of the entire Italian economy. . It will be worth more than 226 billion euros by 2032.

A new government hoping to retain power will likely review these numbers with the aim of preserving them, not endangering them.

Alex Sogno
CEO and Senior Hotel Asset Manager
Global Asset Solutions