Palenzona: the pandemic an accelerator of many existing trends

“In many sectors, the pandemic, which has a massive impact on everyone’s lives, has accelerated existing trends.” Prelios Group Chair Fabrizio Palenzona was talking to the editor of Il Sole 24 Ore Fabio Tamburini in an interview during the Real Estate & Finance Summit on 19 May, which examined the recovery of the sector after the Covid-19 pandemic. “In the real estate area, we have seen the consolidation of a new housing system closely linked to a new approach based on services, affordable prices, a better quality of life. Senior and student housing, for example, or a new offer of high-spec rented residential properties. Meanwhile, new requirements have emerged and interest is growing in asset classes such as logistics, data centers or the self-storage market, which were practically unknown in Italy”.

According to the Prelios Chair: “This new approach in real estate is combined with huge liquidity on the markets and the important development potential of Italy, which has a particularly interesting property supply chain. I believe the sector’s growth will continue to strengthen, but it depends on two essential factors: legal and regulatory certainty, and clear execution times. We are fortunate to have the credibility of Mario Draghi’s presence in the government, our country offers wonderful cities and if we can follow Milan’s lead in implementing exciting projects, we have large foreign investors interested in investing in the most beautiful country in the world.” There is no shortage of institutional investors, Palenzona added, but “they will be even more active if we respond to a core need for rules and efficiency, because we are hampered by the chaos of our laws and intermediaries.”

The Prelios number one observed: “urgent action is necessary on the well-known problems of transparency and efficiency, which Italian authorities often display, by bringing in the reforms the country needs: this will guarantee the reliability domestic and international investors require for important real estate projects. And it would put the resources of the Recovery Plan to the best possible use.”

As regards credit “The next few months won’t be simple because the moratoria will expire and we will certainly see the ‘UTP wave’, estimated at 130 billion euro, people are talking about. But it won’t overwhelm us, because we know how to manage it. Our banking system is no longer in the desperate state it was in 2009, Italian banks have far more solid bases and there are proven tools, like the GACS state guarantee, as well as successful specialized servicers like Prelios or Amco, whose job is to manage and resolve these positions as effectively and efficiently as possible.”

The Prelios Group Chair ended the conversation with the editor of Il Sole 24 Ore by stating: “I’m realistic, but also optimistic. Because we now have a well-established sector to manage the business situations classified as UTPs. In other words, companies experiencing temporary financial difficulties, to be rescued with the right tools if they have a capacity for innovation and the ability to stay on the market.”