According to international real estate advisor Savills, prime Milan office rents are showing signs of growth for the first time in two years.
The report shows that CBD rents currently stand at 480/m²/year, up from 460/m²/year in the first quarter of the year. In the semi-center and out-of-town office locations, rents have remained stable at 330/m²/year and 230/m²/year respectively. Demand has been largely focused on sub 5,000 m² premises, with just under 50% of these transactions involving the banking/finance/investment sectors.
In terms of yields, they remained fundamentally stable with a slight downward movement on prime CBD yields in the second quarter of 2010, bringing gross yields to 6.0% (from 6.25% in Q1 2010).
Susan Trevor-Briscoe of Savills Italy says: "Healthy market indicators for Q2 2010, especially for the prime sector, confirm the constant need in Milan for high quality premises. Although a positive trend cannot be confirmed we expect occupier and developer activity to continue in this segment of the market."
Savills states that development completions were ongoing in Q2 2010 and pipeline projects ensure a flow of new, prime, Grade A space onto the market. This, the firm says, will reinforce the focus on quality of space.