.… while the RESIDENtial property category appears more solid then ever.
A few months have passed since the last of these articles: it took a while to get a clear picture of some of the trends that the first year of the Covid era triggered, particularly with regard to the changes of focus with respect to investments in the various asset classes. What we are seeing more than anything else are changes in the mindset of the end users, which are always the most difficult to interpret. But as the months wore on, and especially after the summer of this year, 2021, I and many other observers have been able to zero in on at least a few answers.
The main institutional observers have seen clearly how the Logistics sector is emerging as an obvious asset class.
When I talk about “asset classes” I refer to the categorization made during the conference held (in presence, at long last!) in Santa Margherita on September 17 and 18. I attended the conference, and can report that the main institutional operators there expressed a strong belief that the Logistics sector is emerging as a valid asset class that, like managed residential property, is proving increasingly interesting as income property and, like the hospitality sector, is currently enjoying reconsideration according to the new standards. Basically, after an adequate restructuring of the properties, it is a category of real estate from which significant performance can be expected in the coming years. The Office sector remain a class in which builders may need to rethink the open plan design. The forecast is for large but subdivided spaces, and thus the need for much larger buildings. The only asset class clearly in difficulty remains Retail, and shopping malls in particular, which will have to find new solutions to attract the attention of a public that is increasingly drawn toward online purchases. The difficulties of the pandemic and social distancing indoors only added to the problems of the sector. In short, we can say that the questions we were asking ourselves in the past autumn have found pretty clear and unequivocal answers on the world markets.
Summer 2021 made it clear that the vitality of the markets is focused particularly on hedonism and physical wellbeing.
In my opinion, the reactions to the global pandemic offer very different and particularly exciting responses to the questions regarding the change of outlook currently observable. This past summer 2021 made it abundantly clear that there is a great vitality with regard to hedonism and physical wellbeing as absolute priorities for every segment of the population in the more highly developed and affluent parts of the world, but also a stronger tendency to want to spend more time together more comfortably, particularly on the part of families. The average vacation periods have grown longer, eschewing short trips in favor of long stays of weeks and even months, with beach and mountain resorts reporting clamorous demand in July and August.
Residential property purchases that have lagged in the cities are experiencing a boom in the more exclusive coastal locations. There is high demand also for houses with gardens in the country and hills, and for homes with terraces that are now, I think, the future of Italian residential property. In the city centers, the prevalent interest is for the medium/large properties, between 90 and 150 sq.mt., while smaller apartments are becoming harder to sell.
In the cities of central northern Italy, there is increasing attention to the residential target known as “senior living”, where the clientele consists of buyers over 65. This is expected to be a major new development in the coming years in Italy, though it is already widespread in northern Europe, with a clear social function in a world of spreading solitude, which in Great Britain has been under observation since 2018 where a specific ministry is engaged in managing the negative effects of solitude. The entrepreneurial initiatives of so-called “senior living” are also a good illustration of the exceptional growth and resilience of the residential sector, indicating that it is time to pay closer attention to this highly promising category of real estate and showcase the best proposals. I will try in my next articles to go more into depth and suggest a few of the initiatives that appear most interesting to me in the residential sector, that is always a special focus of this blog.
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