10.01.2023

The urban regeneration of the Lombardy periphery

The urban regeneration of Lombardy’s peripheral areas is a key driver for the regional and national economy, and for the quality of life of millions of people. The degraded, disused or areas at risk of degradation cover a total land area of about 22.6 square kilometres, and 67,300 buildings, almost all of them (98%) predominantly residential, to be redeveloped, which could revitalise the area’s working and productive fabric thanks to a change of use towards economic activities capable of increasing value.

The peripheral territories of Lombardy and a new centrality

Lombardy is an interesting laboratory for the analysis, study and implementation of regenerative models for peripheral territories: reinventing the dimension of the urbe through the restitution of new ‘centralities’. Peripheral territories represent an important challenge for the construction of an urban identity extended to the supra-local, regional scale, capable of facing a general redistribution of quality, resources and opportunities. Peripheral areas must become, through regeneration processes, an integral, meaningful and desirable part of a region that aspires to be balanced, sustainable, inclusive and, therefore, resilient and attractive.

The possible urban regeneration processes of the Lombardy laboratory, in addition to the previously estimated areas directly related to urban areas that have seen their original economic function cease and that may see their redevelopment in a working key, will affect approximately 250 square kilometres of land area and a gross buildable area of 91 million square metres.

The future urban functions will be articulated in a mix of uses that will see a prevalence of residential surfaces (39.9 million square metres, or about 44%), followed by logistics and production surfaces (29.6 million square metres, or 32.5%), office and commercial surfaces (14.3 million square metres, or about 16%), and facilities of collective interest (7.2 million square metres, or just under 8%).

The real estate market in Lombardy

The real estate market in Lombardy in 2021 was confirmed as the most dynamic in Italy, with purchases and sales up by about 14% compared to the Italian average of about 11%. In the region, even the average prices of residential property, which had reversed their downward trend three years earlier than in the rest of the country, showing weak signs of recovery as early as 2016, subsequently consolidated until 2019, after the contraction in 2020 have returned to growth, showing prospects for further improvement in 2022.

In Lombardy, a total of 140,000 residential property sales are estimated at the end of the year, corresponding to over 23% of the national total, quantifiable at 600,000 transactions. The region’s weight on the country, after remaining stable for eight years with a share of around 20%, has grown from 2016 until today, with further expectations of an increase to a weight of around a quarter of the total exchanges. Thanks to a steadily growing population until the beginning of 2020, twice as many houses are exchanged in Lombardy as in Lazio, second in Italy with around 67,000 transactions, and almost two and a half times as many as in Emilia Romagna, third with 59,000 transactions, Piedmont and Veneto, with around 58,000 and 56,000 exchanges respectively.

Forecasts for 2022 indicated an increase in volumes transacted on the Lombardy residential market of around 13%, with slightly less pressure than at present, against a national growth rate of 8.3%.

The average prices of the residential sector recorded in Lombardy in 2021, despite the evident difficulties of some territories, confirm the overall good health of the real estate industry, with an increase of about one percentage point, after the decrease of equal weight in 2020. The region had faced the positive phase of the new real estate cycle more consistently than the country’s average: after losing about five percentage points between 2008 and 2009, average prices fell by a further two points between 2010 and 2012 and by one percentage point in the following three years, before returning to positive territory in 2016. In Italy, on the other hand, the negative trend continued for ten years, with the previous year closing at parity only in 2019, followed by a decrease of two points in 2020, a minimal positive adjustment by the end of 2021, and growth forecasts of around two per cent for 2022.

An analysis of the provincial capitals of Lombardy

Milan represents Italy’s largest market, as well as the second largest for the residential sector nationwide after Rome. Purchases and sales recorded in the city in 2021 cover 19% of the total for the Lombardy region and 66% for the provincial capitals, while the city’s turnover accounts for over 82% of the turnover realised in the provincial capitals. All the main market indicators referring to Milan’s weight have been confirmed in the last 12 months compared to 2019, with purchases and sales gaining just under 25 percentage points over 2020 and 4% over 2019, and turnover increasing by about 23 percentage points and just over 1% over 2019. A further expansion of increases is expected next year, with turnover and sales increasing, albeit with less intense variations than at present.

Brescia, Monza and Bergamo vie for second place in the regional ranking. Brescia ranks first in this relative ranking by a wide margin in terms of the number of purchases and sales, with 2,800 transactions compared to the approximately 1,800 of the other two capitals, while Monza has a turnover that is approximately ten million euros higher than its competitor (428 million euros compared to 418 of Brescia and 357 of Bergamo). The capitals are forecasting growth in both turnover and the number of sales, although Brescia is proving to be the liveliest market and is recovering strongly compared to its rivals.

Como, Varese and Pavia weigh, in terms of turnover, between 1.5% and 2% of the total of the regional capitals, with a trend, except for 2020, of stable growth, while they record, for the current year, a number of purchases and sales of 1,300, 1,000 and 1,350 units respectively (between 2.5% and 3.3% of the total).

Cremona, Lecco, Lodi and Mantua each achieved a turnover equal to one per cent of the total, confirming what was recorded in the period before the Covid emergency and with a positive trend confirmed for 2022 as well. Among these four capitals, as far as the number of purchases and sales is concerned, Cremona is in first place with about 1,060 transactions, followed by Mantua with 1,020, Lodi is in third place with 850, Lecco in fourth with 830. All the forecast data for turnover and trade indicators are on the rise.

Sondrio is the last provincial capital in Lombardy both in terms of turnover, on which it weighs less than 0.5%, and in terms of the number of trades (they account for about 1%). The weight of the two indicators for the city is also expected to increase in the coming year.

The attractiveness of the suburbs of Lombardy’s capitals

The trend of the real estate market in Milan presents an element of great change compared to the recent past: the area is the reference point for the greatest changes in the indicators over the year. In 2021 the top five positions, represented by seven areas, are occupied by suburban districts in which price increases exceeded six percentage points.

Looking at the development of values in the most dynamic districts of Lombardy’s capitals, this trend is not as pronounced. Three semi-central districts are now at the top, as well as three peripheral ones at the top of the ranking. The results are representative of the changing interest in the residential sector at every level. Borgo San Giovanni, Zima-Cremona, Ronchi, San Polo, San Bartolomeo and Sant’Eufemia are all in Brescia, all located in areas outside the city centre, but representative of a very different building, urban and social fabric and absolute house values.