of the downturn in real estate leasing, Antonio Fabrizio
reports.
leasing has come to an and. After more than a decade of continual
growth, except for a short period in 2003 due to a short-lived
termination of fiscal incentives, the market over recent months has
seen a sharp downturn in business.
In November, Fabrizio Marafini, the general director of national
leasing association Assilea, said at the Leasing Life’s
annual Asset Finance Distribution conference that new business in
real estate leasing dropped by around a quarter between June and
August last year. 
New business volumes for the whole of 2008 totalled €11.2
billion, far below expectations, according to Assilea’s head
Rosario Corso, who is also chairman of Locat.
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Real estate leasing is “clearly feeling the pain more than other
segments,” Corso said.
Summing up the situation, Corso added: “On the one hand,
businesses are much more cautious when it comes to new real estate
investments and in multi-annual commitments.
“Likewise, leasing companies are more cautious in verifying the
economic viability of perspective investment projects, and more
selective in allocating the less available liquidity on the
market.”
This leasing decline reflects the downturn in real estate sales
in Italy. In the first half of 2008, according to industry data,
the total number of real estate transactions dropped year-on-year
by more than 12 percent.
Commercial property – which includes shops, shopping malls and
stores – declined 10 percent, while offices were more than 12.5
percent down. While the downturn in this sector started in early
2008, the speed of the collapse increased during quarter four,
traditionally the strongest quarter of the year.
“Changes in the real economy, with reduced demand, have added to
tensions
in the financial markets and their effects in terms of increased
cost of borrowing and less liquidity available to finance
big-ticket real estate,” Corso said.
But a drop in business volumes by one lessor in particular,
Banca Italease, has also contributed to the overall bad
performance. The Milan-based lessor, which has been at the top of
the Italian leasing market for many years, saw a 70 percent drop in
new real estate business.
Much of this is attributed to its collapse of business lines
following the derivative losses it suffered in 2007. Having since
embarked on a policy of being choosy about what big ticket (above
€25 million) deals it signs, contributions to the parent’s revenues
have shot down from €711 million in 2007 to €65 million last
year.
