MILAN-International investors are missing opportunities in Italy because of pre-formed ideas of insufficient market transparency, weak rental growth, below-average building quality, high tax rates and inefficient bureaucracy, says Hendersons Global Investors.
In a new study by Henderson Research, it said that economically, "two decades of anaemic economic growth, the absence of meaningful structural reforms and notorious dysfunctional politics do not help Italy’s reputation as an investment destination."
However the 'Club Med' term not only displays inappropriate arrogance towards southern Europe, it also bands together economies that have little in common. Italy does not fit well into either group, and is far from being peripheral.
"Fears of international property investors mainly revolve around the perceived country risk heightened by uncertainty about the sovereign debt issue," it says. "As at mid-2010, however, distressed sellers are nowhere to be seen in Italy, yields for prime product are hardening and rents are close to bottoming out. Italian players are not surprised by the markets apparent resilience and look ahead with cautious optimism to a return to the familiar pattern of slow growth."
Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.
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