leasing sector has been hit hard by the recession, it appears to
have so far escaped the traumas being endured by the construction
market. Antonio Fabrizio reports.
estate sector fell 46 percent, while at the end of last year Jones
Lang LaSalle, an investment management company, estimated that it
plummeted by 55 percent.
By comparison, new business volumes in the Italian commercial
real estate market declined 25 percent in the first three quarters
of 2008, according to Rosario Corso, the president of Assilea, the
country’s leasing association.
Meanwhile, Germany saw a 3.3 percent increase in commercial real
estate leasing, and in Spain real estate leasing dropped by a mere
€0.3 billion, trifling when compared with the marked downturn in
the country’s construction industry. Certain individual players,
such as Crédit Agricole in France and Piraeus Leasing in Greece,
also continue to thrive amid the downturn.
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The declines in real estate leasing are larger, however, than
declines in other leasing sectors. Also, as real estate deals tend
to be larger than most other leasing transactions, even a small
reduction in the number of deals can have a large overall impact on
volumes. The decline in the Italian market has translated into
bigger difficulties for Italian lessors and started a “period of
reflection” which is likely to characterise the industry for some
time to come, according to Corso.
Although smaller than the hit suffered by the wider real estate
industry, the reduction in Italian real estate leasing is
significant considering half of all the country’s leasing deals are
real estate related. Also, half of all of Europe’s commercial real
estate deals are signed by Italian lessors.
For some, the current pressure on real estate lessors could be a
blessing in disguise. Italy has seen a period of almost
uninterrupted growth for the past decade, with volumes increasing
from €3 billion to more than €22 billion.
After such a deluge of business, a “period of reflection” might
well be the order of the day.
The recession also coincides with what appears to be an upturn
in opportunities arising from the public sector. There is a
particular interest in real estate leasing among southern European
municipalities and local administrations, largely driven by changes
to local real estate laws.
