The Italian and European real estate market is going through a phase of profound structural uncertainty. Inflation, interest rate fluctuations and geopolitical tensions have challenged established dynamics, redefining demand and investment behavior. But the most significant change is not the volatility itself: it is about how the industry is learning to respond.
Increasingly, in fact, the focus is on assets and strategies capable of maintaining utility, value and attractiveness under different future scenarios. It is a more mature and long-term projected approach, based on the ability of spaces to evolve over time-an element that today drives choices in residential, corporate, and investment.
Residential: quality of living as a lever of value in the long term
In 2025, despite a gradual easing of rates, the high cost of real estate and lenders’ prudence continue to make access to housing complex. The result is a clear mismatch between supply and demand, especially in large cities and in the rental market.
What is changing, however, are the priorities of households. There is a growing demand for housing that can support evolving lifestyles: energy-efficient systems, flexible spaces suitable for hybrid work, and environments that support daily well-being. Driving buying and selling are new-build or high-performance properties, while dated or large-footprint homes are increasingly struggling to attract buyers, in part because of their poor adaptability.
This change also reshapes the geography of living. Suburban and suburban neighborhoods with good connections and amenities are gaining appeal, especially when they provide a better quality of life at more affordable costs. Families are no longer just choosing where to live, but how to live, favoring functionality, comfort, and settings capable of accompanying different stages of life.
The residential market is thus shifting from square footage to the quality of use of spaces and their ability to meet tomorrow’s needs as well as today’s.
Corporate and investment: performance driven by flexibility and functionality
At the European level, the corporate sector is showing signs of renewed vitality. In the first half of 2025, investments reached 95 billion euros (up 11 percent from the previous year), confirming a gradual stabilization. The rise of alternative asset classes-multifamily, hospitality, logistics-now accounting for about one-third of total investments, represents a structural shift in strategies.
In Italy, interest remains focused on core properties with solid tenants, but scarcity of prime space and low vacancy rates open new opportunities for redevelopment and value-add projects, especially in segments in line with evolving social and economic needs: logistics, living (from student housing to senior housing) and hospitality.
Corporate tenants are also rethinking workplace strategies. Companies prefer versatile spaces in semi-central areas with modern infrastructure, good accessibility and more competitive costs. It is a shift that reflects a broader need: to have workplaces that can adapt to different operating models, support hybrid work and be efficient over time.
In all these choices-investment, development, and leasing-a key principle emerges: the assets that maintain their relevance, because they know how to evolve along with changes in work and mobility, are those that attract capital and ensure stable performance.
From reaction to anticipation: a new approach to real estate strategy
The dynamics of recent years have pushed the industry toward a more forward-looking view. In an environment where volatility is likely to become a constant, long-term competitiveness increasingly depends on the ability of real estate to retain functional and economic relevance.
This means integrating features that promote durability in use:
- High energy performance;
- Flexible or modular layouts;
- Locations related to major infrastructure;
- Hybrid or mixed-use functions;
- Technologies that improve management;
- Alignment with ESG criteria and regulatory developments.
Elements, these, that allow properties to remain attractive to tenants and investors even with changing needs.
The concept of “value” expands: it depends not only on location or size, but on the ability of spaces to provide enduring utility, support new behaviors, and adapt to demographic, technological, and organizational change. Assets designed with this vision do not just mitigate risk: they create new opportunities for growth, regeneration, and innovation.
A market that evolves with people
The transformation of real estate is already underway. Families, businesses and investors are adapting to a more flexible, digital and experience-conscious society. And the market rewards spaces capable of evolving with these expectations.
Looking to the future, the real players will be those who can move beyond adaptation and focus on anticipation. The industry is no longer driven by those who own the assets, but by those who design them to remain relevant in a changing world.
