International investors and corporates have discovered Italy鈥檚 second city in a big way, fuelling demand for modern infrastructure and real estate of all types 鈥� notably in the residential sector.
Milan鈥檚 modern, glassy skyline and bustling 15-minute neighbourhoods have made Italy鈥檚 second city the country鈥檚 most-hyped destination for young workers today. It鈥檚 a cool city, where fashion and finance firms co-exist in its downtown districts, flanked by the latest restaurants, shops and bars. International real estate investors feel 鈥榗omfortable鈥� with the transparency of the city鈥檚 capital markets, while a growing range of blue-chip firms have gelled with its business-like approach, establishing headquarters here in significant numbers.
In fact, it would be easy to overlook that just a decade ago, Milan neither felt not looked like much of an international metropolis. It sat in Rome and Florence鈥檚 shadow: uglier, seedier, a regional business capital and little more. The turning point came with the investment made for Expo 2015, transforming the city into the investment mecca it has become today, perhaps surprising local citizens first and foremost with its new-found fame.
Expo success
Expo 2015 marked only the second time that Milan was selected to host the World Expo, the first being back in 1906; this time the selected theme was 鈥淔eeding the Planet, Energy for Life鈥�. In the 18 months preceding the event, everything that could go wrong, went wrong. Hastily thrown up buildings, fudged and 鈥榠rresponsible鈥� design choices (as the media dubbed them at the time) and scandals around poorly paid labour dogged the construction phase. Newspapers were sure that nothing would be ready in time: it nearly wasn鈥檛. But somehow, Milan produced a minor miracle.
Positive infrastructure decisions, judicious neighbourhood regeneration schemes and some genuinely interesting architecture left the city much richer than before. It also left space for Milan to keep reinventing itself as a city of events: today it routinely offers 鈥榳eeks鈥� built around design, furniture, fashion, wine and jewellery which maintain its reputation as a city of discovery. Year-round tourism flows have doubled according to Mayor Giuseppe Sala (see below). Dario Leone, head of hospitality and leisure at Savills Italy, calls Expo 2015 an 鈥榚xceptional鈥� case study. 鈥楨vents don鈥檛 always create a notable boost, to a city, never mind a country,鈥� he says. 鈥楨xpo 2015 transformed Milan, and therefore transformed Italy.鈥�
Research and science
Almost 10 years on, the city is close to being a victim of its own success, with housing shortages placing upward pressure on rents and leaving its young professionals struggling to make ends meet. But the dynamic authorities of the wider region, prioritising housing as part of a slate of other infrastructure and real estate schemes, are ready to take on that challenge.
Lombardy Region councillor, Guido Guidesi, says that Lombardy has become one of Europe鈥檚 most attractive destinations, thanks to an 鈥榚cosystem ranging from education to research, through supplies, services, and production; this is the added value that Lombardy offers to those who want to invest鈥�. He also notes that many of the most exciting projects across the region are connected to its vibrant past, namely 鈥榠deas linked to the industrial and productive history of Lombardy鈥檚 various boroughs鈥�. At this year鈥檚 Mipim, Lombardy had 23 projects on show, ranging from hospitality/tourism to education/training, from student to senior housing, from residential to services, all seeking to woo international capital in the real estate space.
International investors have already 鈥榙iscovered鈥� Milan in their droves, and many are now firmly established in the city with local offices. While Hines was one of the most significant first movers, it was quickly flanked by the likes of M&G, Patrizia, Colliers Global Investors and more. 鈥楳ilan has often been the destination of choice for newcomers to the Italian market,鈥� explains Marco Montosi of Savills. 鈥楾hat is why it is Italy鈥檚 most liquid market and is experiencing incredible levels of demand at the moment. The residential market is important with build-to-rent growing as a relatively 鈥渘ew鈥� asset class, although the business case still slightly favours build-to-sell in the city.鈥� Logistics is another lively market, thanks to the northern logistics corridor, demographics and wealth of Italy鈥檚 northern cities and towns.
Compared with other European hotspots for real estate, Milan still lags a little in overall transparency and track record, but Montosi believes that is changing. 鈥業nward capital flows are around 50-50 domestic and international. Milan is a consolidated investment hub for Middle Eastern, Asian, US and European money, with Germany one of its biggest fans.鈥�
Despite the work done around the time of Expo 2015, Milan is still very much a city under construction. 鈥業n the southern quadrant of the city there is visibly a lot of work going on which will affect the whole municipality,鈥� Montosi adds. This includes Porta Romana, home to the virtually complete Olympic Village developed by Coima for the Winter Olympics in 2026, which will be jointly hosted by Milan and the alpine town of Cortina.
See also: Porta Romana: from railway yard to Olympic Village
Mayor of Milan hails city鈥檚 global status
The city of Milan will see more than 鈧�10 bn of funds invested in major urban developments in the next few years, according to mayor Giuseppe Sala. Speaking at the 2024 ULI European Conference, held in Milan, Sala told the audience of real estate leaders that while 10% of this money would be EU funds, 鈥�90% will be coming from you鈥�.
Looking ahead to the Milano Cortina 2026 Olympics, due to start on 6 February 2026, Sala added: 鈥榃e see the Olympic Games as a catalyst. We are organising this without spending any public money 鈥� the total building cost of the arenas and accommodation is all being covered by the private sector.鈥� He said: 鈥榃e will show the world that we are now the real international city of Italy. Some places see immigration as an enemy 鈥� we don鈥檛. The Italian average for immigration is 9% 鈥� Milan has 21% and it鈥檚 working. They [the immigrants, ed.] are bringing ideas and creativity.鈥�
Sala acknowledged that housing shortages, pushing up rents, have created a critical situation in the city. But he said that 鈥榟ousing is a fundamental tenet of everyone鈥檚 life, for a good standard of living for both the individual and their family. I am trying to ensure an equitable housing market.
鈥業n Italy, actual land use decisions are primarily made at a local level by municipalities. We have a strong collaboration with the real estate industry, and I see this as the best way of making the housing market work.鈥�
Sala added: 鈥楳ilan has become a global city. We have eight universities, with 220,000 students, out of 1.14 million residents, which is similar to Boston and Paris. Some 10% of those students come from abroad, helping our reputation grow. In design, bioscience and pharmaceuticals, Milan is at the centre of the Italian economy.鈥�
Around 50% of Italy鈥檚 real estate deals happen in Milan, he noted, explaining that the spotlight that turned on Milan during and after Expo 2015 was still intensifying. 鈥楾ourism numbers have doubled 鈥� there鈥檚 no real low season anymore,鈥� he added, describing the city as the 鈥榖ackbone of the national economy鈥�.
