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A day in Milan, the city that is reemerging from Lockdown


Three days after Boris Johnson announced new restrictions for the UK, following a recent increase of Covid-19 cases, we are all wondering what our lives will look like in the upcoming winter season. Will we be able to go back to our office in October as planned, or must we, given the advice to workers who CAN work from home to keep doing so, stay glued to Zoom for the foreseeable future?

Before lockdown, we used to meet the majority of our clients face to face, feeling that it was the most effective way to build up a rapport, make decisions and implement plans. However, since March we have adapted to a completely different reality,choosing virtual meetings and avoiding the office or public spaces. Even after society started to open up, security has remained a priority.  But finally, after several months of working from home, last Wednesday I was able to travel to Milan and carry out some meetings in person.

Visiting a city that I know very well, it is clear to me that Italyis starting to return to normal and that the Italian retail sector is trying to resume its usual activity and opulence. However, it hasn’t been an easy ride and not everyone has come through unscathed. Covid-19 froze one of the biggest real estate and commercial projects in Italy: Westfield Milan shopping centre, a mega project by Unibail-Rodamco-Westfield, now postponed to an undisclosed date. It would be such a shame if we didn’t get to see this 1.6 billion euro project materialising in Segrate, on the outskirts of Milan.

Other projects seem to be going ahead. A couple of months before lockdown, Hines had just signed contracts to acquire the iconic 27-story mixed-use Torre Velasca tower in the centre of Milan, on behalf of the Hines European Value Fund. Built after the war and located near Duomo di Milano cathedral, the medieval-influenced Torre Velasca comprises over 20,000 square metres of office, multifamily and retail space and is set to be transformed into a high-quality office-led, mixed-use scheme, with the intent of leveraging the global firms wider placemaking experience to enhance and fully reposition the surrounding piazza.

As I arrived at my first meeting, Francesca from Rustioni & Partners was waiting for me and took me through to the firstmeeting room I had seen in six months: matching faces tonames felt very refreshing. First, we had a catch up with the on-site team about the Italian market and the way Milan and Italy are recovering from lockdown and the devastatingclosure of all businesses. There is a lot to talk about. The turnover of the Italian real estate market will not reach 110 billion euros in 2020, according to an article by Sole 24 Ore and Scenari Immobiliari, down 15.2% compared to 2019. Theresidential sector is losing 10%, the hotel sector is falling by 70% and the tertiary sector by almost 30%.

However, Milan is the main “magnet”. Most of the investments (57%) came to Milan while only 9% of the total went to Rome, according to Bnp Paribas. At the moment, returns on high-end investments seem to be holding at around 3.30% for the office sector in Milan and 4% in Rome. High street returns in Milan are at 3.25%, while the city shows great stable values also for logistics, with average returns at 5.25%.

Next up, another meeting, this time in Corso Buenos Aires. Stretching over 1.4 kilometres it’s the longest shopping street in Italy, if not Europe. Another opportunity to see clients I have only met on screen before, building up an emotional  rapport impossible to achieve over Zoom.

Moving around in the city, I could not help noticing how Milan has adapted to new needs and innovations.  Announced in April 2020, Il Piano Strade Aperte (The Open Streets Plan) included low-cost temporary cycle lanes, new and widened pavements, 30kph (20mph) speed limits, and pedestrian and cyclist priority streets. It was heartening to see that bikes now have their own lane, although scooters, segways and hoverboards are also using it. Just like other big European cities, Milan has struggled with keeping its cyclists safe in ever increasing traffic .There was definitely a need to come up with a solution for them. However, speaking to the locals, I hear that giving more space to cyclists has pushed car and motorbike parking spaces between the track and the lane, causing much concern from the entire population and making many question the safety of the scheme.

I left Milan with a positive feeling – the city was filled with optimism despite everything it has suffered and the uncertainty of the months to come. Italy seems to be rising, ready to reclaim its place on the international scene – and even though things are unlikely to return to “normal” in the blink of an eye, it was amazing to finally be able to meet clients and contacts face to face.

With this in mind, offices and shops worldwide must be ready to meet new consumer and occupiersneeds, focusing on safe usage and new digital technologies to enable this. Emerging trends before Covid-19 such as agile working and the use of advanced technology have now been accelerated at a staggering speed and we would all do well to accept and adapt to this new era of transformation.

 

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