Inflation and the ECB's decision to raise interest rates at the end of 2022 have led investors to take a wait-and-see approach and, before launching new projects, they are monitoring the impact of rising capital costs on property pricing.
Although Assoturismo-Cst reported over 400 million certified overnights in 2022 (+38% compared to 2021), the hotel investment sector has not been able to maintain the growth path begun two years ago.A 40% rise in the first six months
After an enthusiastic first half of the year, that closed with €755 million in transactions (+40% compared to the same period of 2021), the sector literally froze, states the Pambianco Observatory. This trend applied not just to the hotel sector, but to Italian real estate in general, with investors backing down, and the fourth quarter closing with fewer than half the transactions recorded in the previous year. With the high expectations for hotel investment recovery scaled back, total hospitality transactions in 2022 ended around €1.4 billion, a 20% drop from 2021.
Asian investors are looking for opportunistic discounted assets
In cities such as Milan, Rome, Florence, and Venice trophy assets are the top choice despite a very limited supply. Most European investors are expected to focus this year on core properties in Italy. On the other hand, a few Asian are ready to increase their investments in our country, focusing on opportunistic discounted assets so as to redevelop and reposition them pending an economic recovery.
The growing importance of the digital economy
In 2022 some 43% of registered investments went on four single asset deals, including prime resorts and operations in central locations of large cities. This year structural elements such as an increased emphasis on building sustainability, changes brought about by the growing importance of the digital economy, and the search for quality of living environments will influence the market. The new real estate cycle will thus be defined by three major factors: urban regeneration, space hybridization, and sustainability.
