In Italy, real estate really matters, but not on the stock market. Despite having one of the largest national property asset portfolios in Europe - and being a sector that generated 19.5% of GDP in 2023 - only 0.06% of commercial real estate is currently represented on the stock exchange.
It’s a minuscule share (the lowest on the continent), which makes Italy the laggard compared to countries such as Spain (3.2%), France (1.8%), and Sweden (5.9%). In a nation where real estate assets are worth over one trillion dollars, the listed market accounts for just 0.07% of the entire Italian Stock Exchange, compared to a European average of 3%.
This paradox is captured by a study conducted by SDA Bocconi School of Management, in collaboration with the Italian Council of Shopping Centers (CNCC, Consiglio Nazionale dei Centri Commerciali); the outcome is a set of proposals to reverse this trend.
The starting point is critical here. Capitalization is at record lows, and investors approaching these instruments must accept NAV (net asset value) discounts that in 2024 reached a low point of –75%, compared to a European average of around –25%.
The questions
The aim of the study was to understand how to revive the SIIQ model (Società di Investimento Immobiliare Quotate, or listed real estate investment companies), introduced in Italy in 2007 but never truly developed. SIIQs are publicly traded joint-stock companies that invest in income-producing properties (rather than in property sales); the idea is to allow investors to participate in the real estate market in a liquid and transparent way.
The research had a dual objective. This first was to identify the reasons behind the limited adoption of SIIQs compared with REIT (Real Estate Investment Trust) models successfully implemented in Spain, France, and the United States. The second, to explore which reforms could make the Italian real estate market more attractive to institutional and international investors.
In other words: Why has listed real estate failed to take off in Italy, and what can we learn from markets that have succeeded?
Fieldwork
The SDA Bocconi team conducted an in-depth analysis of Italy’s listed real estate market, benchmarking it against major international cases, particularly Spain. In fact, thanks to the 2012 SOCIMI reform, this country turned a marginal sector into a market exceeding €14 billion in annual investments, up 22% in 2024 alone.
The investigation highlighted three main factors:
- Small market size. The number of listed Italian real estate companies can be counted on two hands (seven or eight, depending on the source), and their combined capitalization in 2024 stood at just €600 million, compared to Spain’s €30 billion or Germany’s €60 billion.
- Record NAV discount. Italian SIIQs trade at an average of –75% relative to their net asset value, a clear sign of structural market distrust.
- Penalizing tax framework. Italy is one of the few European countries to impose a 20% “entry tax” on the difference between book value and transfer value of a property. In Spain, by contrast, taxation is deferred until the time of sale, and SOCIMIs benefit from a 0% corporate tax rate.
Comparing the Italian and Spanish models led to several policy proposals:
- Abolish the entry tax, deferring taxation to the time of property sale.
- Open up to foreign capital, allowing foreign REITs to establish and control SIIQ vehicles in Italy or to operate through unlisted SIIQs, following the SOCIMI model.
- Create a dedicated market segment and a simplified “entry package” for startup SIIQs (assets > €50 million).
- Shore up transparency and incentives for institutional investors (pension funds, insurance companies), aligning them with Solvency II and Basel III frameworks.
- Promote financial literacy about the role of REITs and listed real estate, which remains largely unknown to retail investors.
Looking ahead
The analysis confirms that reviving SIIQs is only one piece of a broader strategy to strengthen Italy’s capital markets, whose overall capitalization (39% of GDP) remains well below the levels of Germany (52%) and France (109%).
Aligning Italy’s regulatory framework with the most efficient European models would help attract private and institutional capital, supporting urban regeneration and energy efficiency in a building stock where 85% of residential properties fall below Class C.
The Italian economy deserves better numbers, and comparable countries like Spain show us that change is possible. But to trigger it, what’s needed is a more effective tax policy, one that can turn the illiquid and rarely listed real estate of today into a genuine driver of sustainable and transparent growth for tomorrow.
