Italian real estate fund assets rose to €144.5 billion, with twenty managers running 97% of the vehicles. Offices still account for 56.5% of portfolios while the market buys retail, logistics and living.
Property held directly by Italy's operating real estate funds reached €144.5 billion at the end of 2025, up 4% on the previous year, and Scenari Immobiliari's annual report projects €152.5 billion by the close of 2026, with NAV expected at €132 billion. Those figures place Italy among Europe's more dynamic markets, where total fund assets stand at roughly €1,730 billion, growing 4.9%.
Behind the aggregate sits an unusual industrial structure. Around 700 funds are active, managed by 61 SGRs. Of these, 675 — 97% of the total — belong to just twenty managers, each holding an average €7.2 billion of property. The remaining forty firms share twenty-five vehicles between them. That concentration is not remarkable for a market of this size, but it identifies who actually sets prices: when twenty operators control almost every mandate, each allocation decision carries weight out of proportion to the number of participants.
Portfolio composition deserves closer attention. Offices remain the industry's cornerstone at 56.5% of total assets. Residential has reached 9.7% and hospitality 7%, with retail, logistics and other uses splitting the remainder. The contrast with market investment flows is stark: in the first half of 2026 retail absorbed some €2.3 billion in Italy, logistics almost €1.2 billion and hospitality €1.1 billion, while offices long ago lost the dominant position they held through the previous decade.
Italian fund portfolios, then, still reflect allocation choices made between 2005 and 2015, when prime offices were the institutional asset by definition. Rotation is under way and the numbers document it: offices recorded the largest disposal volume in 2025, around €1.7 billion against €1.1 billion of acquisitions. In every other sector the ratio reverses. The year closed with €3.1 billion of purchases against €2.2 billion of sales.
Proportion matters here. Net rotation of roughly €600 million a year out of offices, against a segment worth over €80 billion, amounts to less than one per cent of that exposure per year. At this pace, bringing office weightings down to levels seen in more diversified European markets would take decades. The predominantly closed-end structure of Italian vehicles — which the Bank of Italy's financial stability analysis credits with making them less vulnerable to liquidity risk than many foreign peers — is also why rotation cannot move much faster. Without redemption pressure, a manager can wait to sell when the price recovers rather than when the market shifts.
The result is a timing mismatch within the same market. New capital — pan-European funds, value-add vehicles, family offices — is entering living, logistics and hospitality, where yields reflect current demand. Capital already committed through Italian funds remains largely in offices, where the decisive question is no longer yield but the capital expenditure required to keep buildings marketable under present energy standards.
That €1.7 billion of office disposals against €1.1 billion of purchases is probably the most honest measure of how quickly this industry is repositioning. Too modest to call a retreat, too slow to read as a strategic turn, it looks instead like an orderly exit run at the pace the vehicles allow rather than the pace the market would suggest.