Investment
Investment volumes strengthened markedly in Q4, reaching 4.6 €Bn, supported by strong activity in the Retail and Industrial & Logistics sectors. Cross-border capital remained a key driver, accounting for 58% of quarterly investment and targeting mainly I&L, Retail, and Hospitality assets. On a full-year basis, 2025 confirmed a re-rating of the Italian real estate investment market, with total volumes of 12.5 €Bn (+23% YoY), underscoring a sustained recovery in transaction momentum.
Office
The office leasing market in Milan and Rome closed the year demonstrating solid resilience, despite operating in a highly selective environment. In both cities, demand is primarily concentrated in central submarkets, amid historically low availability of office space. The partial return of larger-scale transactions has also contributed to an increase in the average deal size. On the investment side, quarterly volumes in the Italian office sector reached 700 €Mn, with Milan and Rome remaining the main reference markets, accounting for 66% and 24% of the total volume, respectively.
Logistics
In Q4 2025, the logistics market recorded a strong acceleration in activity, with take-up reaching circa 840,000 sqm, up +56% versus the quarterly average since early 2024 and +40% year-on-year. The quarter confirmed a clear return of medium-sized (30,000–40,000 sqm) and large-scale (>50,000 sqm) transactions. Full-year take-up reached around 2.4 million sqm (+8% YoY), broadly in line with the long-term average, while vacancy declined to c.6.6%, reflecting ongoing absorption and a more selective, demand-driven development pipeline. Investment volumes surged to circa 960 €Mn in Q4 (+140% QoQ), bringing YTD volumes to circa 2.17 €Bn (+21% YoY). Value-add and Core+ strategies remain dominant, with core capital gradually re-entering the market. Prime rents were stable at 70€/sqm/year in Milan and Rome, while prime yields compressed to 5.25%, signaling improving investor confidence.
Retail
By the end of 2025, Italy’s retail sector entered a phase of renewed stability and selective growth. Prime high‑street locations in Milan and Rome continued to attract strong lifestyle‑driven brands, with sportswear, sneakers, skincare and beauty leading demand. New entries—including Normal’s first high‑street flagship—highlight the market’s dynamism. Italian retail real estate hit record levels in 2025, with €3.5bn invested and retail leading all sectors. Q4 alone reached €1.2bn.
Hospitality
The Italian hotel investment market showed strong momentum in the first half of 2025, with volumes reaching over 1.5 billion, up 85% year-on-year. This marks a significant rebound compared to H1 2024 and already exceeds the full-year average of the previous year. The sector remains attractive, driven by robust performance in key cities like Rome and Venice, which together accounted for 46% of national volume.
Prime yields remained stable in H1, particularly for high-quality assets in the luxury segment, while slight compression was observed in trophy transactions. Given the macroeconomic environment and tight lending conditions, yields may rise for lower-quality assets, but luxury assets are expected to remain resilient. The outlook for the second half of 2025 remains positive, supported by strong demand, a solid pipeline, and sustained interest from international investors.
