GRIStudent housing attracts alternative interest in Italy
GRI Club Italia discussed alternative real estate investments, with student housing attracting most interest in a poll.
February 21, 2019Real Estate
GRI Club Italia met in Milan on 12 February to discuss the state of real estate alternative investments in Italy. In a live, e-voting poll on what types of asset classes could be defined as ‘alternative’ in Italy, student housing, senior living and ‘alternative residential’ scored highest amongst participants’ choices. Asked which alternative asset class or classes they would be ready to invest in, develop or lend to, during the next 12 months in Italy, student housing was selected by 43% of participants, built-to-rent by 38%, and senior living by 38%; hospitality, serviced apartments and co-living were next in order, with each of those sectors being selected by 24% of participants; more remarkably, co-working and logistics were selected by only 19% and 14% or participants, respectively.
Some participants noted that the renewed interest in alternative asset classes in Italy is due to the less interesting value of core products, and that alternative investments are becoming more and more mainstream. Participants discussed a key distinction between investing in traditional asset classes and investing in alternative ones, which is the management of complexity in each phase of a project, and the focus on final users. It was agreed that investors who are capable of understanding the operators’ dynamics and can manage the complexity of the final product may obtain yields significantly higher than with traditional investments. It was noted that operators and innovators of alternative products are largely missing in Italy, but that international players are steadily entering the market.
Secondary city targets
Secondary cities seem to the natural target for alternative investments in Italy, with participants discussing how demographics are strong at both ends of the spectrum: a conspicuous senior segment of the population, as well as a thriving student market. Compared to the city of Milan, secondary cities offer strong demand, with a higher chance of finding the right-size development size at a significantly lower cost, although administrative procedures can still prove complex.
Italy’s real estate markets and alternative investments will be discussed further at Italia GRI 2019 on 22-23 May in Milan.
Some participants noted that the renewed interest in alternative asset classes in Italy is due to the less interesting value of core products, and that alternative investments are becoming more and more mainstream. Participants discussed a key distinction between investing in traditional asset classes and investing in alternative ones, which is the management of complexity in each phase of a project, and the focus on final users. It was agreed that investors who are capable of understanding the operators’ dynamics and can manage the complexity of the final product may obtain yields significantly higher than with traditional investments. It was noted that operators and innovators of alternative products are largely missing in Italy, but that international players are steadily entering the market.
Secondary city targets
Secondary cities seem to the natural target for alternative investments in Italy, with participants discussing how demographics are strong at both ends of the spectrum: a conspicuous senior segment of the population, as well as a thriving student market. Compared to the city of Milan, secondary cities offer strong demand, with a higher chance of finding the right-size development size at a significantly lower cost, although administrative procedures can still prove complex.
Italy’s real estate markets and alternative investments will be discussed further at Italia GRI 2019 on 22-23 May in Milan.