Milan's Office Market: In Search of Quality Properties

In 2024, the Milan office market absorbed around 380,000 sqm , of which 115,000 sqm in the fourth quarter. This is 14% less than the previous year. According to the latest report from Ipi , the decline in figures is due not so much to a drop in demand as to the limited supply of high-end offices (A/A+) and complex urban regulations that make it difficult to launch new projects.

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The most significant impact on transaction volumes was the shortage of quality properties, especially in the prime areas of Milan. As in 2023, only three transactions over 10,000 sq m were concluded this year, with 72% of total absorption in class A/A+ offices .

The most sought-after areas remain the CBD (Central Business District), Porta Nuova and CityLife , where quality office space quickly finds tenants. Investors continue to focus on premium assets , and developers are focusing on the renovation of old buildings , as new projects face bureaucratic barriers.

Vacancy rate

Vacancy rates continued to decline, reaching 9.5% citywide and 2.5% for Class A/A+ offices . Around 43% of the absorbed space (171,000 sq m) was in the city centre and CBD , while peripheral areas accounted for 62,000 sq m (16%) .

The falling vacancy rate is a sign of market stability , although a shortage of quality properties is holding back growth. Tenants are becoming increasingly selective , choosing buildings with high levels of environmental sustainability (ESG) and meeting modern energy efficiency standards.

Rental rates and market trends

Limited supply of high-end offices has driven up rental rates in Milan's business centre.

• In Q4 2024, prime office rental rates in the CBD reached €730/sqm/year , and in some cases exceeded €800/sqm/year for LEED and WELL certified buildings.
• Profitability remains stable: 4.5% net for prime assets and 5.9% for high-quality secondary market properties .

Forecast for 2025

Selective market growth is expected in 2025:
✔️ Concentration of transactions in the high-end segment
✔️ Increased supply due to redevelopment projects
✔️ Focus on eco-friendly and technologically advanced office spaces

Companies continue to prefer modern, energy-efficient offices that are adaptable to hybrid work formats.

Despite limited supply and a challenging regulatory environment , Milan's office market remains one of the most dynamic in Europe , with strong demand and consistent interest from institutional investors .