Fondi Immobiliari - Intervento Massimo Caputi al Seminario FIMIT 2010

8/8/2019 Fondi Immobiliari - Intervento Massimo Caputi al Seminario FIMIT 2010

1/14

CROSS-BORDER REAL ESTATE INVESTMENTS IN ITALY:

recent market trends, current situation and perspectives


2/14

Italian Real Estate market evolution

Throughout Europe and the rest of the world, the 1997-2007 decade was one of enormousgrowth of the Real Estate market.

1/3

Average housing prices in the main Italian cities (1991-2009)

During this period, Italy too went through an extraordinary moment with the

domestic Real Estate market being transformed quickly as ever before

Source: Nomisma processing of data from Consulente Immobiliare.

1


3/14

3

Italian Real Estate market evolution 2/3

During these years several innovations took place in financial instruments, magnifyinginvestment opportunities and raising foreign investors interest:

Italian banks went through mortgages securitization;

the professional management of corporate portfolios and state-owned propertiesbecame more and more important;

an increasing number of real estate assets spin-offs took place to retain a corebusiness;

new forms of retail business were found;

abandoned urban areas were upgraded;

alliances and JV between foreign and domestic Investors/operators were set up;

the first Real Estate funds under Italian law were launched.

2


4/14

4

Real Estate funds have been one of the instruments that mostly contributed to thedevelopment of the Italian real estate market whilst increasing market transparency.Their success and quick diffusion was mainly related to their status of tax efficientvehicle, as well as of a financial instrument subject to a well defined regulatory frame.

Italian Real Estate market evolution 3/3

NAV trends of real estate funds in the major European countries (2000=100)

Source: Nomisma processingof Scenari Immobiliari data.

3

Over the 20002010 period Italian Real Estate funds have shown (and are still

showing) an interesting trend with a compound annual growth rate of ca. 31%


5/14

Cross-border investments in the

Italian Real Estate market

1/3

4

Source: Jones Lang LaSalle.

Transparency score trend of the Italian real estate market

This market trend evolution, together with the introduction of the Euro, was both the cause

and effect of the opening of the domestic market to foreign investments, rendering the

Italian market less provincial.

Over the last decade, the country has risen its competitiveness in several factors andthe Italian property market has grown much more transparent in terms of activities,

players in the market and financial instruments used


6/14



2/3

In this context the Italian Real Estate market has been gradually clearing the ground forthe arrival of cross-border investors, granting the expansion of new players such asmerchant banks, investment funds, pension funds, specialist finance companies,securitizers, developers and asset managers, improving the sector and its overall

transparency.Italy cross-border investments by purchaser origin (%)

Source: DTZ (2008).

5

The main foreign players operating in Italy are primarily represented by Middle-

Asian investors, followed by France Real Estate funds and German Open funds


7/14



3/3

Italy cross-border investments by sector ( bn)

Source: CB Richard Ellis (2009).

Cross-border Investors remain focused on high quality assets, mainly in the retail sector

6


8/14

Italian Real Estate market during the crisis phase

After the global financial melt-down of 2007/2008, strengthening in Q1 2009,markets changed quickly.

Over 2008, Real Estate investments in Europe slowed out of lack of finance and

due to the dependence of the sector on leverage. By the end 2008, the total volumeof investments in Europe was drastically down and in 2 years (2008-2009)investments dropped to about a quarter of the peak period.

European Investment Turnover ( mn)

Source: CB Richard Ellis.

7

1/4

-70%


9/14


Italian Investment Turnover ( mn)

8

2/4

-51%

Source: DTZ.

In Italy the situation is less dramatic than in other countries


10/14

10

3/4

The main reasons that have been driving the different shortfall of the crisis on the Italian

Real Estate market, contributing to its greater resilience, are the following:

Italian Real Estate market has not been experiencing an unsustainable growth

rate during the past cycle


9

1997-2007 change in house prices in leading markets (%)

Source: Economist.


11/14

11

4/4

2008 2009 investments volume (%)


2008 2009

10

the decrease in investment volumes, registered during 2009, was primarily drivenby a reduction in cross-border investments, while domestic equity Investors, less

affected by the economic crisis, havent stop their investment activity.

Source: DTZ.


12/14

Perspectives for the Italian Real Estate market

By the end of 2009 and moving into 2010 (after about 2 years of falling

investments), the global economy and the real estate market seems to have

passed its worst moments.

In this context, a general review of the approach of the major investors has

occurred, focusing on a back to basics approach.

11

1/2


13/14

Perspectives for the Italian Real Estate market

12

Solidity of the real estatemarket Substantial defensive trend of Italy compared toother foreign countries

Transparency Italian market has been reaching top rankings

New credit available Credit institutions starting back to grant financing

New investmentopportunities

Public real estate assets disposal

Distressed-property opportunities

New spin-offs from companies evaluating assetsdisposal

Real estate funds industrys increaseRetail and tourist assets

2/2

Considering the current market trend, the Italian real estate cross-border investments could

be driven by the following factors:


14/14

14

Fondi Immobiliari Italiani Sgr S.p.A.Via Crescenzio,1400193 Roma

Tel. +39 06 68163250Fax. +39 06 68192090

Documents

Fondi Immobiliari - Intervento Massimo Caputi al Seminario FIMIT 2010