The real estate funds industry in Italy has surpassed even the most optimistic forecasts. In five years the number of active funds has risen from 7 to 155 (end of 2006) and will come close to exceeding 200 by the end of the current year. This reveals from the 'Real Estate Funds in Italy and Abroad' 2007 Report, presented by Scenari Immobiliari earlier this week.
Real estate assets have risen from €1.4 billion in 2001 to €30 billion forecast by the end of 2007. This is now the largest asset class of the Italian private sector, overtaking insurance (€24 billion) and banks (€8.5).
In the course of 2006 listed real estate funds had the best performance (ROE) in Europe, with 7.9%. This represents an increase of 26% compared with 2005.
These are some of the figures highlighted by Mario Breglia, Chairman of Scenari Immobiliari, in the course of the presentation of the Sixth Annual Report on "Real estate funds in Italy and abroad".
On a global level, the study reveals, 2006 was the year of real estate investment instruments (real estate funds and REITs). These have assets of over €1,200 billion, which is as much as the value of the entire Italian non-residential sector (offices, shops and industrial property).
In Europe this sector is worth about €480 billion, of which 65.7% is guaranteed by real estate funds and the remainder largely by REITs (along the lines of the Listed Real Estate Investment Companies (SIIQs) that are currently awaiting authorisation in Italy).
In 2001 Italian funds represented 1.3% of European assets, whereas at the end of 2007 they should exceed 8%, recording the highest growth in Europe.
According to Scenari Immobiliari, in the next two years SIIQs will have assets of at least €10 billion. If these are added to traditional funds, the assets of managed savings in real estate will reach over €50 billion.
The portfolio of Italian real estate funds is made up in the first place of offices (53%), followed by retail (18%), industrial (7%), logistics (6%) and others (hotels, homes for the elderly, etc., making up 16%).
In 2006 the number of active funds increased by 167% compared to the year before, rising from 58 to 155. Of these, 27 are for the retail market (22 listed on the stock exchange) and the other 128 for institutional investors, both in Italy and abroad. Net receipts were positive, about €1.7 billion.
"Real estate funds are now an effective and mature product, both for savers and for investors," says Mario Breglia, "and they have a central role to play in the real estate market. Thanks also to the work of the Regulatory Authority, these products are transparent and efficient.
"It is the financial market, instead, that still has to understand them, as is shown by the discount on the NAV that is excessive compared with the practice abroad. The prospects for the listed investment companies are good, in that they offer savers a further choice, even if we are still expecting positive results from the legislative process."
Source: Scenari Immobiliari
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