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November 4, 2010updated 12 Apr 2017 4:18pm

Italy: recovery but no stability

Fabrizio Marafini, head of Assilea, the Italian leasing association, introduces the pre- and post-crisis trends in the market. The sector was hit in terms of supply, due to the liquidity crisis, and in terms of demand, due to the fall in exports and in production output.

By Fabrizio Marafini

Photo of Assilea head Fabrizio MarafiniFabrizio Marafini, head of Assilea, the Italian leasing association, introduces the pre- and post-crisis trends in the market.

 

After doubling new business volumes between 1997 and 2007, leasing in Italy recorded a heavy drop in 2008, mainly because of the financial crisis. The sector was hit in terms of supply, due to the liquidity crisis, and in terms of demand, due to the fall in exports and in production output.

Statistics for 2010 show clear signs of recovery, although the positive trend has not yet stabilised, and it isn’t spread equally across sectors. Overall, volumes are now at much more contained levels than those recorded during the expansion years (2006-2007).

In December 2009, the Italian market grew on a monthly basis for the first time in a year and a half. After returning to negative territory in January and February 2010, the market began to grow again in the spring. In the first eight months of this year, there has been an overall 4% growth both in terms of number and value of leasing contracts. The recovery has been led by equipment leasing (up 7.8% in contract numbers and 13.5% in contract value), which benefitted from tax relief legislation for fixed investments made before 30 June (the so-called Tremonti Ter government budget).

Real estate leasing for property to be built, or “in costruendo”, also increased, with a rise of 40% in the number and value of contracts above €2.5m, partly linked to the boost in investments in renewable energy.

 

Property is prominent

Real estate leasing is still the most important sector in terms of overall volumes in Italy. It represents about 40% of total new business. Following a boom in 2004-2006, however, the segment began slowing down in 2007 and has suffered heavily in 2008 and 2009. This year, real estate leasing is improving, but that is only due to a 27% growth for in costruendo leasing, mostly for operations above €2.5m.

Since August 2009, the market share of “in costruendo” leasing has increased by 10% and it now accounts for half of real estate leasing business overall.

Much better spread is the recovery in equipment leasing. This ranges from 3% growth for transactions below €50,000, to 10% for transactions between €50,000 and €500,000, and 20% for larger transactions.

 

Renewables rise

This growth also reflects the wider use of leasing in the public sector and a strong rise in renewable energy investments.

In terms of alternative energies, we estimate leasing penetration for non-residential solar plants to be 50%, and to reach 10% in the leasing of biomass and thermal power stations.

Assilea figures for the first half of 2010 show that the top 20 leasing companies in renewable energy (those representing 74% of overall new business) have financed more than €1bn, more than the total amount financed in 2009.

We have also seen a wider use of leasing in the public sector. Volumes in the first seven months of 2010 are at €300m, again above the total amount for the whole of last year.

 

LCVs, HCVs, cars

Statistics for the first eight months of 2010 show that the vehicle leasing market has now stabilised. For the first time in two years we see a growth in new business in the commercial vehicle segment (both light and heavy commercial vehicles), as recovery is boosting investments in the production chain.

On the other hand, car leasing is still quite weak. However, the number of contracts is increasing in line with figures for company car registrations. This is because, following the end of the scrappage scheme, which mostly benefitted private car leasing, private registrations have decreased, but companies are investing again in their fleet needs.

See also: Bank-owned leasing thrives

See also: Subsidies help to boost renewables leasing

See also: Italian association Assilea diversifies its member base

See also: Vendor channel ready to rise

See also: New start for troubled lessor

See also: UniCredit rewrites rule book

See also: Top 50 Italian lessors

See also: News in brief

Line graph showing how Italian new business volumes have risen from 2009 lows

Table showing new business in Italy by sector

 

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