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Milan: hotel investments boom with a view to the 2026 Olympics  

Wednesday, 29 September 2021 17:46
Milan Milan

Milan will get 24,000 new rooms between now and 2026. Despite the crisis triggered by the pandemic the city of Milan is not standing still with hotel investors seeing a lot of potential in the city. And not just with a view to the 2026 Olympics. Estimates from World Capital Real Estate for 2022-2023 predict 1,389 new rooms and some 100 projects, 75 of which are already under construction.

Prices withstand the pandemic

New openings focus mainly on three factors: sustainability, safety and hybridization - said Monica Badin, Senior Real Estate Advisor Hotels and Hospitality Investment at World Capital. 

The pandemic does not seem to have overly affected asset prices, with only midscale hotels suffering to some degree and currently at € 165,000 per room in the city centre. In the same area upscale properties stand at €290,000 per key with luxury rooms around  €964,000. 

Prices of hotels rooms could rise 

It is indeed possible that prices could rise again,” added Badin. “In 2020 the cap rate (the expected rate of return based on the projected annual income of a given property Ed.) from international investors fell by 42 points. If we add to this the traditional lack of core assets available on the market, in coming months it is plausible to expect an increasing trend in valuations.

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