Skyrocketing rents, buzzing luxury streets and international investors on the run: Italian retail is shining again, driven by Milan, Florence and the outlets.
Retail is back in the limelight in Italy. And it does so in grand style. According to Scenari Immobiliari’s 2025 report, in 2024 the commercial real estate market will reach €2.6 billion in investments, more than tripling the volumes of 2023. Milan and Florence are at the centre of this new wave of interest, thanks to the presence of luxury streets and exclusive shops that attract international brands ready to invest even in the purchase of historic properties.
In particular, this extraordinary result has been driven by record transactions such as the purchase of the building in Via Montenapoleone 8 by the Kering group for 1.3 billion euro, which has positioned Via Montenapoleone as the most expensive shopping street in the world, with rents touching 20,000 euro per square metre.
Luxury is driving the recovery, especially in the so-called high streets, the prestigious shopping streets. Milan and Florence are now the most dynamic urban poles for investments: in the first three months of 2025 in Italy there were over 550 million euros in transactions, including outlets in Tuscany and Liguria and shops in the central streets of the two cities. ‘Milan remains dominant thanks to the Quadrilatero della moda, but Florence too, with Via de’ Tornabuoni, is attracting important capital,’ noted Federica Camurati of MF Fashion.
Modern shopping centres and outlets on the upswing
Not only luxury streets: modern shopping centres and outlets are also back in fashion. Investors are looking with interest at well-positioned and innovatively managed facilities that offer stable cash flows and integrated services. ‘Centres can no longer be just “cash machines”, they need experiences, catering, coworking, green areas,’ Roberto Zoia, president of Cncc, then emphasised. And there is no shortage of examples: in 2024 important transactions were concluded on outlet villages in Tuscany and Liguria, operations that supported overall volumes.
Monte Napoleone queen of the world’s luxury streets
Via Monte Napoleone, the heart of Milanese luxury, is now the most expensive shopping street in the world, with rents reaching 20,000 euro per square metre. The interest in these spaces is not only about renting: large luxury groups increasingly prefer to buy iconic properties in order to control their own sales space and ensure a stable real estate return over time. ‘After Kering, we expect similar moves from Lvmh, Richemont and other big names in the sector,’ Camurati continues.
Meanwhile, the “secondary” streets of luxury – such as Via Sant’Andrea or Via Manzoni in Milan – also offer opportunities, especially for emerging brands. Contracts are becoming more flexible, with hybrid formulas allowing new markets to be tested without becoming too tied up.
Operators’ growing interest in retail
‘The investment strategies of institutional operators are constantly evolving and are developing innovative leasing models that do not focus exclusively on physical sales space but include higher value-added real estate services, digital communication tools and strategic marketing partnerships,’ explained Francesca Zirnstein, general manager of Scenari Immobiliari. “The main European high streets have experienced a renaissance in recent years, driven by the gradual return of tourist flows to pre-pandemic levels and their subsequent overcoming.
North in the lead, but not only. At a territorial level, the North-West continues to concentrate almost half of the operations, but the Centre (Tuscany, Emilia-Romagna, Lazio) also shows good dynamism. The South and the Islands, although their performance is more limited, are showing positive signs, especially where there are urban regeneration projects underway.
According to Giulia Comparini, of Cocuzza, ‘a tailor-made approach is needed in secondary areas. A well-managed shop can become an engine of urban vitality, but we need to offer more flexibility and shared services’. It is here that new contractual formulas are being experimented with, such as short leases, partnerships and performance-related agreements.
Outlook 2025: +20% retail investment
The forecasts for 2025 are more than optimistic. Scenari Immobiliari estimates a 20% growth in retail investments at European level, up to €35 billion. Italy, just behind the UK, Germany and France, could reach almost 3.2 billion. Driving the sector are the expected drop in ECB rates, inflation under control, and a steadily recovering international tourism. And the ESG lever should not be overlooked: investors are looking for green, efficient, certified real estate.
In parallel, rents and quotations are also rising slightly: +0.4% for shops and +0.6% for large surfaces in 2024, with peaks more evident in the North.
The retail brick is strategic again
In conclusion, Italy confirms itself as a fertile ground for retail investments, particularly in the luxury segment and in regenerated centres. Milan leads the market, but Florence and other historic cities also attract capital. Shopping streets, outlets, multifunctional centres: physical trade is by no means dead, indeed it is going through a period of renaissance. It has become a key instrument of urban regeneration and long-term real estate development.
