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Foreign investors set to dominate Italian hotel market

Milan skyline from Milan Cathedral (“Duomo di Milano”). Italy.

March 2015

2014 saw the total volume of hotel transactions in Italy exceed EUR 500 million, confirming a positive trend which is likely to continue in 2015 as strong international investor interest for the Italian hotel market continues to gain momentum, this according to property consultant CBRE.

The hotel market revival in Italy is being driven by a diverse base of foreign investors with buyers from the Middle East, Asia, North America and Europe. Recent analysis by CBRE estimated that 2015 will see EUR 20 billion of capital into European hotels, fuelled by the liberalisation of domestic controls governing outbound investment. North American private equity funds are also now investing substantial resources in Europe; investment in all European property sectors by North American capital nearly doubled in 2014 to EUR 42 billion and the weak position of the Euro against the U.S. dollar will lead 2015 investment to exceed 2014 levels.

Investors are seeking comfort in Italy’s improving general national economic climate (GNP) which is expected to grow 0.5% after stagnation and recession period which lasted five years. Increased political stability and recent government initiatives such as tax cuts for workers & businesses and labour reform are helping to relieve the banking system from the burden of bad debt and to stimulate and sustain economic recovery.

Trading performance across many Italian markets is now fixed on a trajectory of growth.