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. TThe hospitality sector performed best., recording €1.5 billion in investments – its best result in five years and an 88% surge compared to H1 2024. In Rome, Venice and Lake Como there was a strong activity in luxury assets, with four out of ten largest deals for the semester involving hospitality. Retail saw its best performance since 2019. Logistics and residential also continued their upward trend, with notable increases to volumes and transactions. Office investments remained steady, while alternative assets such as student housing and healthcare gained 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 that real estate players are optimistic about 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.
The performance was once again 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 attracting capital with high-value deals. Four of the top ten transactions of the semester were in this asset class.
According to the previous quarters’ trends, Buy it Now recorded over €500 million in Q2 investments, bringing the H1 total to €1 billion – the sector’s best performance since 2019. The largest quarterly contributions were from the shopping center sector and private investors’ growing interest in trophy mixed-use properties with a high street retailer component located in prime districts in Milan and Rome.
Grandi Stazioni Retail S.p.A. was the concessionaire of retail space for Italy’s largest railway stations. Two major international investors acquired its capital. This transaction is not included in the total volume of investment, but it still signals renewed interest in Italy’s retail sector.
Investment volumes in Q2 2025 will be higher than the previous quarter. sector reached €141 million, bringing the H1 total to €785 million. This is a 61% rise over H1 2020, even with a quarterly slowdown. 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. Prime net yield is unchanged at 5.30% compared to the previous quarter. However, this remains within a context of gradual compression.
The logistics take-up in Q2 was approximately 560,000 sqm, up 13% compared to the previous quarter. Total H1 area is around 1,050,000 sqm. This is a 11% decrease compared to 2024. The occupier market has stabilized, but it still reflects recent sector expansion. The demand for high-quality space remains strong, and newly constructed assets accounted for more than 80% of the Q2 take up. You can also find out more about the following: 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. Overall, the data show a stable trend from year to year. Milan was the most active national market with 84% investment, followed by Rome at 14%.
You can also find out more about the following: 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 quarter in terms of transactions (over 181) since the start the data series. The data series began in the year 2000. 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. The demand for spaces of high quality (Grade A/A+), which account for 74%, continues to be the most dominant. The prime rent remains stable at €775/sqm/year, with an upward pressure expected in the coming quarters.
You can also find out more about the following: RomeOffice take-up in H1 was approximately 53,000 square meters, down 23% from the previous year and 46% on a quarterly basis. In H1, 19% of transactions involved Grade A/A+ property, showing the continued 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. In this context, rental growth will continue to be driven by a limited supply of properties and a modest pipeline of development.
You can also find out more about the following: Living sector attracted approximately €320 million in investments during H1, with over €130 million recorded in Q2 alone. These figures are significant improvements compared with the same periods of 2024. +54% annually and +98% on a quarterly basis. Milan was the top investment destination in Q2, accounting for 60% of all volumes. Rome came second with 20%. Notably, Student Housing About one-third (33%) of the total H1 investment was in real estate, confirming its place as one of the most attractive asset categories for investors who are increasingly focused both on development projects and core product.
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 had 5,505 sales (+7.1% yoy), with an overwhelming preference for smaller homes (over 65% below 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 continued to grow, with 8,528 transaction (+10.7% YoY), continuing the positive trend that has been observed for more than a year. Nearly 50% of the demand (49.5%) was focused on large units (over 850 sqm), while 8.1% were new builds, returning to Q4 2024 levels.
Mortgage rates dropped to 3.22 percent in Q1 of 2025 (-76 basis points YoY), boosting the loan market. Mortgage-backed purchases accounted for 53.5% of sales in Milan and 58.7% in Rome – both up from the previous year. Rental market in Q1 was stable across the country, but with different trends in urban areas. Milan and Rome have seen a steady decline in the number of long-term leases, in favor short-term agreements. In Rome, the standard leases (4+4) fell by 12%. However, in Milan, the decline was moderate (-1,3%) and showed an improvement over previous quarters. Temporary contracts, on the other hand, rose 2.8% in Rome and by 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 was mainly due to the return of large 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. In the Secondly, significant deals were closed. Mixed-use Segment, including a large transaction with a strong Education component.
The first half of 2025 was marked by solid investment growth, as predicted. The Italian market remains attractive for both established asset classes – particularly Hospitality – and emerging segments such as Healthcare, Education. Data CentersAs a result of the technological and social changes,, are on the rise. In an environment marked by shifting weights, the biggest challenge for Italian realty will be to align its long-term structural trend. The aim is to create more opportunities that will meet the expectations and needs of key players. This will strengthen the position of Italy in Europe.
