Italian real estate market

The Italian listed real estate market performed very well in 2017. The Italian index gained +44% over the year, compared to only +18% for the European Index (ex UK). At first glance, this outperformance seems huge, given the short timeframe. However, if we look a bit further, we see a totally different picture. Since 2010, the Italian real estate market underperformed the European market by -90%.

The renewed strength of this market ignored by investors for years can be explained by three factors: improving economic conditions, cheap multiples and companies are now eligible for PIR Funds (tax exempt investment funds, created to stimulate investments).

While the upcoming general elections of March 4th might create some uncertainties on the markets, Italian real estate seems to offer some catch up on the medium term.