Milan Real Estate Prices Surge

Real estate investors from Azerbaijan’s sovereign wealth fund to Blackstone Group Inc. and UBS Group AG are cashing in on a surge in demand for prime Milan offices that’s pushing prices to new highs. A lack of development in Italy’s financial capital is driving up rents just as a scarcity of prime real estate in some western European cities encourages global investors to enter new markets. The billionaire Rovati family, Amundi SA and Invesco Real Estate are all closing in on deals to buy up trophy office buildings in the city, people with knowledge of the transactions said, asking not to be identified because the discussions are private. Italy’s real estate market endured a long period of subdued activity after the global financial crisis because banks were slow to clear up soured property loans, reducing the availability of credit. At the same time, investors were focused on European cities where economic growth was stronger and political risk lower. That pushed prices in major markets like Paris, Berlin and Frankfurt to record highs, making Milan look cheap by comparison.