Italian real estate market achieves record volume in H1 2026

According to analysis from the Dils Research Team, the Italian real estate market recorded its strongest first half in history, attracting €7 bn in investments in H1 2026.

Italy - Dils

This figure represents a 28% increase over H1 2025 and a 62% surge compared to the last ten-year average, highlighting the market's robust growth and appeal to capital. Investment activity accelerated significantly in the second quarter, contributing approximately €4.3 bn, a 56% increase over Q1 2026.

Retail was the most dynamic sector, with €2.3 bn invested in H1 2026, marking its best quarterly performance ever in Q2 with €1.6 bn. The market was boosted by trophy asset transactions, including the Via Montenapoleone 8 property in Milan and a major pan-European outlet portfolio acquisition. Investor interest also returned strongly to the shopping centre segment, which attracted over €1 bn in investments over the past twelve months.

The logistics sector experienced strong acceleration in H2, with nearly €1.2 bn invested in the first half, a 50% increase year-over-year and the best result in four years. The quarter was driven by three major portfolio acquisitions by international institutional investors, including the largest logistics real estate portfolio transaction ever completed in Italy. Demand for space reached an all-time high, with 1.6 million m2 absorbed in H1, and over 3 million m2 in the past twelve months. Activity was concentrated in Northern Italy, particularly Lombardy and Emilia-Romagna, with retailers accounting for the majority of large transactions. Prime rents continued to rise, reaching €73/m2/year in Milan and €72/m2/year in Rome and Bologna.

The hospitality sector attracted approximately €1.1 bn in H1 2026, with €660 mln invested in Q2 alone, a 55% increase over Q1. While lagging behind the exceptional H1 2025, the sector remains strong, with volumes 23% above the ten-year average. Milan was the most active market, accounting for 40% of capital, although the two largest deals occurred in Rome. Investment interest also expanded to Alpine destinations in Valle d'Aosta and Alto Adige.

Office investment volumes reached approximately €880 mln in H1 2026, a 13% increase over H1 2025. Activity was dominated by small-to-medium-sized transactions in Milan and Rome, excluding the Via Montenapoleone 8 office component. Milan and Rome accounted for 84% of domestic investments, at 50% and 34% respectively. On the occupier front, Milan saw a 35% decrease in take-up due to a severe shortage of high-quality assets in sought-after locations. Average transaction size fell below 800 m2, while prime rents grew to €900/m2/year. Conversely, Rome experienced a 27% increase in take-up, driven by larger transactions (5,000-10,000 m2), with prime rents remaining stable at €630/m2/year.

The living sector continued its strong momentum, with €730 mln invested in H1 2026, the best result in a decade and a 69% increase year-over-year. Investment was driven by new developments and repositioning, with the student housing segment nearly tripling its volume to nearly €300 mln due to high demand and limited supply in university cities.

In Q1 2026, residential property transactions increased by 4.4% year-over-year to 179,654. While new construction accounted for 6% of national transactions (lower than Q4 2025), the figure remains higher in major cities like Milan (11.6%) and Rome (9.5%). The financial environment remained favourable, with average mortgage rates at 3.57% and 47.8% of purchases involving mortgages. Rental trends varied, with Rome seeing a slight increase in standard contracts and overall rental volumes, while Milan experienced a decline.

Alternative & mixed-use contributed significantly to H1 investment, with nearly €890 mln in volume, supported by transactions in the Data Centre and Leisure segments, including the acquisition of the Unipol Forum in Assago.