MILAN-Prime office rents in the central business district of Italy's financial capital Milan should remain stable throughout 2011, while any growth in retail rents will be in supermarkets due to higher demand, according to real estate consultancy Savills.
Office rents grew slightly to $690 per square meter in the fourth quarter from $634 per square meter in Q4 2009, while take-up increased by 35%, which bodes well for 2011, said Savills Italy Research Head Susan Trevor-Briscoe.
With development completions, 3.2 million square feet of new office space came on line in 2010, helping meet demand for quality premises, but this increase in new stock may widen the gap between prime and secondary stock.
The banking, finance and investment sectors were the most active in Milan in 2010, accounting for 20% of overall take-up, with the insurance sector taking on 13%. The demand for unit sizes stabilised, with demand highest for 16,000- to 32,000-square-foot units, accounting for more than a quarter of overall take-up. Yields were fundamentally stable during the year, with a modest improvement the CBD, according to Savills.
Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.
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