26/06/2009 - Real estate, 10% drop in stores and offices

The economic crisis has made it hard to start new business, a fact confirmed by trends in the non-residential real estate market published by Tecnocasa and the Agenzia del Territorio showing drops in all sectors both in prices and transactions. Between 2007 and 2008 there were only negative results in transactions: -15.5% for offices, -11.7% for stores and -8.7% for industrial sheds. The office sector dropped the most despite the lower prices (down 2.1% for existing and 1% for new buildings in the second half of the year), reporting a 15.5% downturn in transactions. The sharpest drop was in Lazio with a 3% loss in value. Even rents were down; -3.4% for existing offices and -2.8% for new or renovated. The drop in consumer spending, -1.4% is the Confcommercio estimate for 2009, is pulling real estate prices down for stores, which in the second half of 2008, lost 1.3% of their value on the high streets and 2.6% on those less busy, and even price drops didn’t help the number of transactions, down 11.7%. The biggest drop was in the Emilia-Romagna region, with negative values higher than 4% both in the centre urban areas and the outskirts, while Milan remained high where a store can cost 10,000 euros a square metre compared to the national average on high streets of 2,500 euros. For a rental property the average is 180 euros a square metre annually. Industrial sheds did better, mostly for artisan workshops and garages whose value dropped 1.5% for existing properties and 0.6% for new constructions. Emilia-Romagna also showed signs of the crisis with a drop of more than 4%, and the Veneto region showed slight signs of doing better with +0.3% and +0.8% for new and existing.