Italian real estate investment reached a record €12.4 billion in 2025, a 20% increase year-over-year, according to Colliers Italia. The surge marks a structural shift in capital allocation, with retail properties regaining prominence as investor targets.
Through the first nine months of 2025, investments in Italian commercial real estate totaled nearly €8 billion, representing a 24% increase compared to the same period in 2024, with the third quarter alone accounting for €2.4 billion – a 3% rise above the five-year average. Milan continues to dominate the market, attracting 28% of total investment volume, equivalent to €2.2 billion, while Rome secured 12% of the total.
International capital continues to drive growth, representing approximately 60% of the total invested. This influx of foreign funds is supported by a stabilizing macroeconomic environment, including a 0.4% GDP growth in the second quarter, a spread below 100 basis points, and an inflation rate of 1.6%, below the European average. The European Central Bank’s stabilization of interest rates at 2.15% after seven consecutive cuts has also contributed to the recovery of credit availability.
The retail sector experienced a particularly strong rebound, with investments reaching €2 billion since the beginning of the year – a 29% increase. Shopping centers and outlet malls accounted for 80% of this volume, attracting capital beyond traditional core markets. Hospitality also saw significant growth, with investments of €1.7 billion, a 60% increase, led by activity in Rome.
Owner-occupier purchases and core operations are gaining traction, while value-add investments are decreasing. Logistics remains a resilient sector, with €1.2 billion invested and prime yields at 5.25%. The living sector, driven by student housing and urban conversion projects, maintains a steady pace with €640 million in investments.
According to Colliers, the Italian market is transitioning from a “recovery story” to a “conviction market.” The firm’s Q4 2025 Investment Market Snapshot highlights the renewed investor interest in retail alongside the stabilizing influence of logistics and hotels.
