Italy’s real estate market attracted €5.2 billion in investments in the first half of 2025, a 50% increase over the same period last year, according to Dils Research. The hospitality sector was the standout performer, recording €1.5 billion in investments – its best result in five years and an 88% surge compared to H1 2024. Activity was particularly strong in luxury assets across Rome, Venice, and Lake Como, with four of the semester’s ten largest deals involving hospitality. Retail also saw its strongest performance since 2019, while logistics and residential continued their upward trend with notable increases in volumes and transactions. Office investments remained stable, and alternative assets such as healthcare and student housing gained further momentum.
According to the Dils Research Team, investment volumes in Q2 2025 reached €2.5 billion, up 56% compared to the same period last year. This confirms the positive sentiment among real estate players for 2025. Looking at the first half of the year, the Italian market attracted €5.2 billion in investments, a significant 50% increase over H1 2024.
Once again, the performance was driven by the Hospitality sector, which recorded its best result in the past five years thanks to investments exceeding €850 million. The sector recorded €1.5 billion in H1, marking an 88% increase compared to H1 2024. Activity was particularly strong in some of Italy’s top tourist destinations – including Rome, Venice, and Lake Como – with a clear focus on the luxury segment. Hospitality continues to attract capital through high-value transactions, with four of the ten largest deals of the semester belonging to this asset class.
In line with the trends of previous quarters, Retail recorded over €500 million in Q2 investments, bringing the H1 total to €1 billion – the sector’s best performance since 2019. The strongest quarterly contributions came from deals in the shopping center segment and the growing interest of private investors in trophy mixed-use assets with a high street retail component, located in prime districts of Milan and Rome.
Noteworthy is the significant deal involving Grandi Stazioni Retail S.p.A., the retail space concessionaire for Italy’s main railway stations, whose capital was acquired by two major international investors. While the nature of this transaction excludes it from the total investment volume, it nonetheless signals a renewed interest in the Italian retail sector.
In Q2 2025, investment volumes in the Logistics sector reached €141 million, bringing the H1 total to €785 million. Despite a quarterly slowdown, this represents a 61% increase over H1 2024, confirming a positive trend. The Q2 decline is attributed to temporary factors, while structural market dynamics – including a robust pipeline of upcoming deals – suggest a likely increase in H2 volumes. The prime net yield remains stable at 5.30%, consistent with the previous quarter, though within a broader context of gradual compression.
Logistics take-up reached approximately 560,000 sqm in Q2, up 13% from the previous quarter. The H1 total amounts to around 1,050,000 sqm, down 11% compared to H1 2024. The occupier market is stabilizing, though still reflecting the sector’s expansion in recent years. Demand remains strong for high-quality spaces, with newly built assets accounting for over 80% of Q2 take-up. The national prime rent remained unchanged at €70/sqm/year in the Milan and Rome markets, while the Verona market saw an increase to €60/sqm/year.
The Office sector recorded €300 million in Q2 transactions, bringing the H1 investment total to €790 million. The data shows overall stability year-on-year. Milan remained the leading national market, accounting for 84% of investments, followed by Rome with 14%.
In Milan, office take-up for H1 2025 reached approximately 205,000 sqm – including 100,000 sqm in Q2 – marking a 15% increase compared to H1 2024. This was the best semester in terms of number of transactions (over 180) since the start of the data series. The occupier market was driven mainly by demand for medium-sized spaces, with 51% of take-up involving units between 1,000 and 5,000 sqm – the highest share in five years. High-quality (Grade A/A+) spaces continue to dominate, accounting for over 74% of total take-up. The prime rent remains stable at €775/sqm/year, with an upward pressure expected in the coming quarters.
In Rome, office take-up reached 19,000 sqm in Q2 and approximately 53,000 sqm for H1, down 46% quarter-on-quarter and 23% year-on-year. Among the roughly 70 transactions in H1, only 19% involved Grade A/A+ properties, highlighting the ongoing shortage of high-quality stock. This scarcity is no longer limited to the CBD and Historic Centre but is also starting to affect occupier choices in the EUR Core area, where prime rents have increased to €400/sqm/year. Against this backdrop, further rental growth is expected, driven by limited supply and a modest development pipeline.
The Living sector attracted approximately €320 million in investments during H1, with over €130 million recorded in Q2 alone. These figures represent significant increases compared to the same periods in 2024: +54% year-on-year and +98% quarter-on-quarter. Milan remained the main investment destination, accounting for around 60% of Q2 volumes, followed by Rome with 20%. Notably, Student Housing accounted for roughly one-third of total H1 investments, reinforcing its position among the most attractive asset classes for investors, who are increasingly focused on both development projects and core products.
In Q1 2025, the Italian residential sales market continued its positive momentum from 2024, recording 172,048 transactions – up 11.2% year-on-year.
Milan saw 5,505 transactions (+7.1% YoY), with a strong preference for smaller units (over 65% under 85 sqm). New builds accounted for 9.5% of sales – returning to stable levels after the previous quarter’s spike due to several project completions – and remained 3.7 percentage points above the national average.
Rome also maintained growth, with 8,528 transactions (+10.7% YoY), continuing a positive trend observed for over a year. Nearly half of demand (49.5%) focused on mid-to-large units (over 85 sqm), while new builds made up 8.1% of transactions, returning to pre-Q4 2024 levels.
Favorable financing conditions continue to support the market: in Q1 2025, average mortgage rates fell to 3.22% (-76 bps YoY), boosting loan uptake. Mortgage-backed purchases accounted for 53.5% of sales in Milan and 58.7% in Rome – both up from the previous year. The rental market remained stable nationally in Q1, though with differing trends in major urban areas. Milan and Rome saw a continued decline in long-term leases in favor of short-term contracts. In Rome, standard leases (4+4) dropped by 12%, while in Milan the decrease was more moderate (-1.3%) and showed improvement over previous quarters. Conversely, temporary contracts rose by 2.8% in Rome and 6.0% in Milan.
With total H1 volumes of approximately €790 million – €580 million of which were recorded in Q2 alone – the Alternative sector once again proved to be among the most attractive for investors. This result was driven particularly by the return of major transactions in the Healthcare segment, which saw €266 million in Q2 investments thanks largely to two portfolios included among the top ten transactions of the quarter. Significant deals were also closed in the Mixed-use segment, including a major transaction featuring a strong Education component.
As forecasted, the first half of 2025 closed with solid investment growth. The Italian market remains attractive for both established asset classes – particularly Hospitality – and emerging segments such as Healthcare, Education, and Data Centers, which are gaining momentum in response to society evolution and technological innovation. In a global landscape marked by shifting balances, the main challenge for Italian real estate will be to align with long-term structural trends. The goal is to continue creating new opportunities that meet the expectations of key players, thereby reinforcing the country’s positioning within the European context.
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