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According to the Dils Research Team, the third quarter of 2025 closed with €2.6 billion in investments, recording a slight decline compared to the same period last year. However, over the first nine months of the year, the Italian market attracted an investment volume of around €8.0 billion, marking a 21% increase over the corresponding period in 2024 and confirming the confidence of real estate investors.
Quarterly performance was driven by the Retail sector, which, with investments exceeding €1.1 billion, recorded its best result in the past five years. The year-to-date total, amounting to over €2.2 billion, reflects a 38% increase compared to 2024. The main contributions to these results came during the quarter from the completion of two transactions, each valued at over €400 million, in the Shopping Center and Factory Outlet segments. Over the nine-month period, a total of five transactions exceeded the €100 million threshold.
With €260 million invested, the quarter reflects a slowdown in the Hospitality sector, due to the scarcity of transactions with significant pricing that had characterized previous quarters. Nevertheless, the approximately €2 billion invested year-to-date represents a 56% increase compared to the first nine months of 2024, confirming the asset class as one of the most attractive. Investors remain particularly active in Italy’s main cultural cities and tourist destinations, with a strong focus on the luxury segment.
As previously anticipated, the third quarter of the year saw a recovery in investment activity in the Logistics sector, with over €410 million, following the temporary slowdown in Q2. Year-to-date, total investments stand at approximately €1.2 billion, keeping volumes broadly in line with the first nine months of 2024. About 20% of the quarter’s investments were allocated to the light industrial segment. The prime net yield remains at 5.30%, albeit within a broader trend of gradual compression.
Logistics space absorption reached approximately 665,000 sqm in the third quarter, marking an increase compared to both the previous quarter (+40%) and the same period in 2024 (+20%). This represents the best quarterly result in the past two years. Year-to-date, total take-up amounts to approximately 1.64 million sqm, slightly down compared to the first nine months of 2024 (-7%), but improving over the -11% recorded at the end of the first half. The logistics occupier market therefore confirms signs of stabilization and remains on track to exceed 2 million sqm of total take-up by the end of 2025. On the rental side, the national prime rent remains stable at €70/sqm/year in the Milan and Rome markets.
In the third quarter, the Office sector recorded transactions totaling €300 million, bringing the year-to-date investment volume to approximately €1.1 billion. The data highlight a 29% decline in activity compared to the first nine months of 2024. Milan remains the main national market, absorbing 74% of the capital invested in the sector, followed by Rome with 22% of the total.
The office market in Milan recorded a take-up of approximately 72,000 sqm in the third quarter, bringing the year-to-date total to 280,000 sqm, in line with the same period in 2024. The quarterly figure, however, reflects a slowdown, due to the scarcity of available space: in the most sought-after submarkets, such as the CBD and Porta Nuova, vacancy stands at around 1% of total stock. Absorption continues to be concentrated mainly in the 1,000–5,000 sqm range, which accounts for over half of the total volume, while only one transaction above this size was recorded, hindered by the lack of immediately available space in central submarkets. The combination of limited supply and still strong demand for high-quality space has pushed the prime rent to €800/sqm/year, with expectations of further growth in the coming quarters.
In the Rome office market, the third quarter saw an absorption of approximately 45,000 sqm, bringing the year-to-date total to around 97,000 sqm, down compared to 2024 both on a quarterly basis (-25%) and year-to-date (-24%). Only 23% of the transactions completed involved Grade A/A+ properties, confirming the persistent scarcity of high-quality space amid solid demand for large units. This shortage, no longer limited to the CBD and Historic Center, is now affecting the EUR Core area as well, where the prime rent has stabilized at €400/sqm/year. In this context, rental growth prospects are strengthening, supported by limited supply and a constrained development pipeline.
During the quarter, investment volumes in the Living sector showed a recovery: the €280 million recorded in Q3 bring the year-to-date total to around €650 million, more than triple and more than double the figures for the same periods in 2024, respectively. Milan remains the main investment destination, absorbing around 86% of the quarter’s volume, followed by Rome with a 9% share. The most common type of transaction involves the conversion of office buildings into residential properties, particularly for sale in individual units. In terms of ticket size, the most significant deal of the quarter involved a Student Housing asset, which consolidates its position among the investors’ preferred asset classes, driven by interest in both development projects and core products.
In Q2 2025, the Italian residential sales market remained positive, with 201,344 transactions, up 8.1% compared to the same period last year. Milan recorded 6,491 transactions, marking a 6.6% increase over Q2 2024. The market continues to be skewed toward smaller units, with approximately 65% under 85 sqm, as historically observed. New constructions account for 6.6% of total transactions, showing a slight decline compared to previous quarters, reflecting a general slowdown in deliveries. At the national level, the new-build segment represents 5.6% of the market. Rome also showed growth, with 9,839 transactions (+7.1% vs Q2 2024). About half of the demand focused on medium-to-large units over 85 sqm. New constructions account for 7.1%, following a rebalancing trend after the peaks observed in previous quarters.
The second quarter closed with average mortgage rates at 3.18%, down 36 basis points compared to 2024, supporting borrowing. The share of purchases financed with a mortgage remained around 53% in Milan and increased by 1 percentage point to 59.6% in Rome.
On the rental side, the market in Italy showed a slight increase across most contract types, except for standard long-term leases, which recorded a slight decline. In major cities, the trend reflects a shift from long-term leases to short-term and student-friendly contracts. In Rome, the trend appears to be stabilizing, as the contraction in standard contracts (-6%) was smaller than in the previous quarter, while overall rents increased by 2.8%. In Milan, the decline was more pronounced, with standard contracts down -8.6% and rents down -8.4%. Following the national trend, short-term leases continued to grow in Rome, volumes increased 16.0% and rents 28.6%; in Milan, volumes rose 4.2% and rents 7.5%, respectively.
With a total volume of €870 million in the first nine months, including approximately €200 million recorded in Q3 2025, the Alternative sector remains consistently among the most attractive asset classes for investors. The quarterly dynamics were particularly driven by Telecommunications transactions, which accounted for 42% of the sector’s quarterly volume.
In line with expectations, the first nine months of 2025 closed with solid investment growth. The Italian market continues to prove attractive, both for the more established asset classes – among which Retail stands out – and for emerging segments such as Education and Data Centers, which are showing increasing potential in response to social transformation and technological innovation.
The recent positive performance of the Italian market is part of a broader context of renewed vitality across Southern European markets, which in recent months have distinguished themselves through resilience and their ability to attract capital, despite an international environment that remains complex and characterized by constantly shifting dynamics.
