Our objective is to manage in the best way the real estate assets we are given by our clients, building with them a mutually beneficial long term relationship.
We, at PPC – Private Property Consultants, believe that Milan is the only location in Italy where it still makes sense to have a real estate portfolio, the market is extremely liquid - reaching high prices per square meter especially with small residential units – it profits from a diversified and lively demand for rentals all year long.
Milano enjoys a significant flow of foreign students, just mentioning one of the many factors, coming to the city every year in order to attend among the best Universities our country has to offer. Foreign students have always been the main target of our property management role when dealing with small to medium residential units. Coming from affluent families, who are supporting them during the college years when they are abroad, they bring with them the smallest credit risk for the landlord, and this is paramount in a country that does nothing to protect the asset holder from potential delinquencies.
While we strongly advise retail investors to buy – directly - residential properties in Milan, having the firm belief that a direct investment in real estate is more than beneficial for a family overall asset allocation, we reached the conclusion, on the other hand, that the office market is now limited to institutional investors and large investment funds. The best corporate tenants are now looking for contemporary office-only buildings, even with low carbon footprints, they have no interest in office units, tipically at the ground or first floor, within mixed used assets built in the 50s or 60s of the last century. These properties should be transformed into small residnetial units when possible, or just sold on the market.
Looking at shops, commercial properties along the main streets of the city, we cannot underestimate the regime shift they are currently suffering with a large part of the overall retail sales made online. In the near future we see an active market of these assets only along few famous streets characterized by the “high street” retail, leaving all the rest of the properties suffering and changing hands at high rental yields (this is actually already happening).
Our mission is to make sure the assets we are given are always paying off their owner, being continuously rented out to good quality tenants at sustainable - across the business cycle - rental yields.
We have always focused on managing real estate portfolios of family offices and small institutional investors, who understood that the best way to manage their properties is to trust someone who is looking at the long term picture and who is unbiased by potential short term economic incentives. We monitor closely our tenants, especially when they communicate their notice periods, so to be able to reposition immediately the asset on the market, even sooner than the actual departure of the current tenant.
When dealing with commercial real estate, we have been always driven by the aim of helping the landlord and the tenant to build up a long term relationship based on a sustainable rent. We believe it makes no sense at all to have a shop or a hotel, for instance, rented above market rate for a few years and later being obliged to suffer months, if not years, of zero revenues because the property is empty. The upside for the asset holder is given mainly by the consistency of the retun and not so much from its level.
When helping existing clients and new contacts to decide if a property is good or not for their real estate portfolio, we base our decision on a thorough analysis of the sustainable rent that the asset can produce. It’s paramount, especially in these last few years, not to fall prey of the unclear upside promised by new ways of renting real estate assets. We strongly believe, for example, that short term rent is extremely competitive and so not worth the effort for a smart real estate owner.