Photo: Mipim 2024I am pleased to accept the invitation of Remind’s Chairman Paolo Crisafi and Vip Guest Mipim to contribute to the subjects concerned that are dealt with in the Mipim (the international real estate fair in the beautiful setting of Cannes).
Moreover, I would like to greet the organizers of the fair, Filippo Rean (Rx Italy Chairman and General Manager of Rx France) and Nicolas Kozubeka (Mipim CEO), besides Matteo Zoppas, ICE Chairman, whose organism through the Government promotes the consolidation and the economic-commercial development of our enterprises on the foreign markets. In order to act as an entity charged with promoting the attraction of foreign investments through multiple activities, just like the Mipim.
As you know, Italy boasts an extraordinary cultural heritage, rich in works of art, historical monuments and finds that testify to the importance of the millennial history that permeates our country and makes it unique in the world. From the Renaissance masterpieces of Leonardo Da Vinci and Michelangelo to the ancient ruins of Rome and Pompei. An inexhaustible source of inspiration and knowledge is perfectly reflected in the nation’s economy characterized by a fervent productive fabric. It is also capable to develop and produce a wide range of high quality products under the aegis of an innate creativity that has contributed to positioning Italy as a global centre of excellence in manufacturing and in the field of research and development.
We often consider Made in Italy as a symbol of excellence in design, fashion and the automotive industry. However, we rarely reflect on the fact that even the real estate and infrastructure sector can be counted among these expressions of prestige. Our towns are a tangible testimony.
If we can look beyond the obvious, we realize that the very fabric of our cities, the streets and alleys that breathe the history and Italian culture are the result of that complex mixture of tradition and innovation, of beauty and functionality that have always been the essence of Made in Italy. From ancient noble residences to modern skyscrapers, from the classic elegance of Renaissance palaces to innovative architectural solutions, “made in Italy” manifests itself in the quality of materials, attention to detail and constant research of harmony and aesthetics. This value in real estate goes beyond the exterior appearance of buildings.
It is rooted in the passion and skill of our architects, engineers, surveyors, developers, designers, accountants, entrepreneurs, operators, managers, freelancers and artisans who work tirelessly to create spaces that reflect the best of our culture and identity. This culture that we well know, makes our nation one of the most sought after destinations by tourists from all over the world and, in my opinion, it offers many investment opportunities.
Surely, tourism is one of the main assets in Italy. With 223 billion of turnover and 4,2 million employed, the tourism sector affected until 2019 for 13% on the gross domestic product. After the dramatic contraction due to the pandemic in 2020, especially as regards the share of international tourists, since 2021 there has been a partial recovery in this sector. The year 2022 has consolidated a positive trend: foreign travelers' spending in Italy has more than doubled compared to 2021, returning close to pre-pandemic levels. In 2022 Italy has further expanded its market share on global tourism, from 3.9 to 4.5% becoming the fifth country in the world for tourist revenue (preceded by the United States, United Kingdom, Spain and France) and maintaining the position of the third EU country already registered before the pandemic. Investing in the big cities of art or in the most renowned places certainly provides great opportunities, but we must not forget also all those small realities capable of offering cultural experiences capable of returning with the maximum expression the authenticity of our traditions. Investing in small Italian locations can be a strategic opportunity for investors looking to capitalize on the authenticity, exclusivity and growth potential of lesser-known destinations. Over the centuries, Italy has demonstrated an extraordinary ability to combine its solid traditions, evident in the fields just mentioned, with a fervent spirit of innovation and technological development. For this reason, the government of President Giorgia Meloni and Vice-Presidents Matteo Salvini and Antonio Tajani is intensifying its efforts to create an environment more conducive to innovation, in particular that linked to sustainable development and scientific research: assets that represent a strategic importance to ensure relevance and competitiveness to Italy in such a complex and diversified global context. Start-ups are among the main generators of innovation and technological development. Start-ups often conceptualize, develop and offer cutting-edge products and technological solutions in so-called frontier sectors that lead to the emergence of new markets and needs.
In recent years, Italy has witnessed significant growth in the proptech industry, a fusion of technology and real estate that is revolutionizing the way people buy, sell and manage property.
There has been a good proliferation of start-ups in the sector. Innovative companies are emerging with innovative solutions capable of addressing different challenges that the real estate sector poses. From online platforms that facilitate property search and rental management, to blockchain-based solutions for property transition, there is a wide range of offerings that are changing the face of the industry. However, there is certainly still plenty of room for innovation and future development. With the constant advancement of emerging technologies such as artificial intelligence, blockchain and the internet of things, the potential for further transformation in the industry is enormous, thanks also to an increasing number of international operators, which looks with greater attention to the opportunities offered by our Nation.
We are committed to fostering the growth of this “attractive ecosystem” through a plurality of tools and initiatives. Among those that I consider of fundamental importance there is certainly a series of actions aimed at encouraging public-private partnership that too often is reduced to project finance. It is actually a mode of interaction between public and private sector aimed at the realization of a work of all its stages of grounding. In Italy, there is still a clear design difficulty on the part of the municipalities that could be compensated by a virtuous relationship with the private. In the Procurement Code we have dedicated a whole chapter to the revision of the PPP to enhance all the positive elements and, in particular, insisting on the need for a non-episodic contractual relationship, but long-term to achieve certain results of public interest.
Moreover, I would like to remember two instruments that are implemented: the contracts of development and the only ZES of Southern Italy.
The development contract is a “negotiated” concessionary measure for large investments in various sectors. The main objective is to support the supply chains, develop the production network (also with the use of the network contract), and attract foreign investments, with positive spillover effects on the entire national ecosystem. It is intended for companies of all national and foreign dimensions, including networks of companies with a maximum investment in the Italian territory in different sectors, including industrial, environmental and tourism.
By Invitalia report of December 2023, we know that 1513 applications were submitted with 63,9 billion investments planned and 27 billion facilitation required. 359 large investments financed with 14.9 billion euros of facilitations granted which about 75% in the Southern Italy.
Regarding ZES, I would remind you that they are special economic zones within which companies already operating or newly established can benefit from tax concessions and administrative simplifications. The constitution of an only ZES will allow maximizing in the international scene the competitive impact of the entire South Italy with its already important productive apparatus. It represents a potential to be exploited in its many sectoral and territorial articulations, with the recognition of equal opportunities for development to all the territories of southern Italy and to all the companies already established in the South, or that would settle in it.
As I said during Italian Investment Council Remind, a growing macro-economic framework confirms the goodness of the actions undertaken in the next two years. According to the latest estimates, Italian GDP will grow by 0.7% in 2024 and by 1.2% in 2025, data certainly in line with the European average and very far from some states currently experiencing moments of recession. Inflation is expected to rise from 5.9% in 2023, to 1.8% in 2024, to 2.2% in 2025.
This is a very important data for those who deal with public finance. A large proportion of public finance aggregates, although not automatically, are strongly affected by inflation. For this reason, the greater effort, in quantitative terms of the last manoeuvre (one of them more concentrated in distributive terms on the theme of the recovery of purchasing power), meets these needs: compensate for the effect of inflation.
It is understood that a decrease in inflation in the next few years should allow for a lower degree of concern on the part of budgetary policy intervention. After a four-year period 2020-2023 with very high volatility, we aim at a biennium 2024-2025 of great restart.
In 2022, foreign direct investments in Italy (FDI) have registered a trend of growth, in particular marking a +37% since 2015 and reaching a stock of 430 billion euros. With 150 innovative ecosystems and significant production diversification, Italy presents the conditions to increase its ability to attract further foreign investment.
With 150 innovative ecosystems and significant production diversification, Italy presents the conditions to increase its ability to attract further foreign investment.
Regarding real estate sector, it is interesting to focus on the activity carried out by institutional investors, always a good indicator of health: against transactions in 2023 amounting to approximately 6 billion euros, a decrease compared to the average of the last 10 years (9 billion euros) certainly linked to the credit squeeze resulting in higher interest rates.
It is dutiful to signal a clearly improvement of the performances in the hotel section (1,1 billion euros), to demonstration of the elevated level of attractiveness by now reached from our Country, and of the logistic section (1,7 billion euros)thanks to the progressive process of infrastructure that is now affecting transversally all our territory.
We want to enhance our public real estate assets, among the most beautiful in the world, along a guideline that we can summarize in four S: social housing, student housing, senior living and security, thinking about “Caivano d’Italia”.
The complexity of all these aspects has given rise in Italy to a new way of considering the implications due to these systems so complex: real estate expanded to other productive sectors of the economy. In fact, if you consider the sectors that are activated by the real estate, we conclude that a large part of the Italian economy rests on everything that revolves around the design, production, management, maintenance and regeneration of buildings, infrastructure and transports; as well as in general on the activities of investment, valorisation and security of the Nation.
This estimate could be even wider, considering that the data is not detectable in its entirety. The sectoral classification of national accounts does not allow listing the multiple real estate assets that are aggregated in other sectors. For example, think of the financial services sector where banks and insurance companies have an important real estate part of their overall business, but in Italy is not taken over, while in other countries, they form a service bank called FIRE.
The FIRE Sector, acronym of Finance, Insurance and Real Estate, covers a range of financial activities, insurance services and real estate transactions that deeply affect the economic and social fabric of many nations. In fact, this interconnectivity is not only an aspect of academic interest, but also an essential component that supports the economic stability and well-being of people and businesses worldwide.
An approach to real estate, understood as a vision that considers the interaction and integration of this sector with other productive sectors, it certainly helps us to stimulate security and economic growth, the promotion of sustainable development and the construction of a better present and a more prosperous future.
In greeting all the participants, I would like to conclude in the awareness of the importance of the work carried out by the representatives of the real estate, infrastructure and mobility sectors that are driving the economy; as well as being the main business cards of our cities and expression of Made in Italy.
