Italian Property Market Attracts Growing Interest From Gulf Investors

When Mubadala Investment Company recently committed hundreds of millions of dollars to affordable housing in Italy, it marked a notable shift away from the Gulf’s traditional focus on trophy properties.

The move, announced in August, reflects a broadening of regional interest in Italian real estate, adding to a wave of significant institutional activity even as the Iran conflict continues to weigh on some retail buyers, according to analysts.

Qatari and UAE royals have historically favored prized assets such as mega-villas, castles, and luxury hotels, said Angela D’Amico, Deloitte’s head of infrastructure and real estate in Italy. While that pattern remains true, regional sovereign funds, investment managers, and developers are now expanding into more diverse residential and commercial ventures. “There has been a very strong dynamism in the last few months,” D’Amico told AGBI.

She noted that available data remains largely anecdotal, with more Gulf acquisitions likely flowing through large global funds and institutional investors. Mubadala’s $700 million backing of ADD Capital, an Italian-led, Luxembourg-based vehicle focused primarily on Italian affordable housing under a government scheme, represents the most significant departure yet from typical Gulf investment patterns, D’Amico said. The Kuwait Investment Authority is also reportedly involved, according to Italian news reports, though it has not officially confirmed its participation. “It’s a totally different investment from what we are used to seeing,” she said.

Elsewhere, Saudi hospitality developer Red Sea Global has selected a small island off the northern tip of Sardinia as the site of its first overseas project.

Traditional trophy investments have continued alongside this diversification. Al-Mirqab, a fund linked to Qatar’s royal family and former prime minister Hamad bin Jassim bin Jaber Al Thani, acquired 80 percent of one of Italy’s most prestigious commercial addresses, Via Monte Napoleone 8 in Milan, for more than $1.3 billion in April. “For Qatar, the appeal is straightforward,” said Columbus International, a real estate advisory firm. “There is no new inventory on Via Monte Napoleone. There never will be.” The same family office also purchased Villa Certosa, the Sardinian villa once owned by late Italian prime minister Silvio Berlusconi, for more than $400 million in June.

“In just two or three months, these totally different investments have directed some $2.5 billion of capital at our market,” D’Amico said. “Surely these are record figures.” Late last year, Abu Dhabi developer Eagle Hills and Italian investment manager Coima announced plans to jointly redevelop an industrial area in Rome into a mixed-use district.

D’Amico said it remains unclear whether the Iran conflict has played a direct role in encouraging Gulf investors to diversify their strategies. Still, the six-month-long war has clearly affected individual buyer interest, according to Simone Rossi, co-founder of Gate-away.com, an Italian property listing platform aimed at foreign buyers. Inquiries from the UAE fell below 2024 levels during the first six months of this year, following 27 percent growth the previous year, according to internal figures shared with AGBI. Meanwhile, interest from Saudi Arabia, Qatar, and Kuwait grew compared with last year, approaching or surpassing 2024 levels, though from a much smaller starting base, Rossi said.

Rossi noted that some UAE-based buyers had hoped to sell properties in Dubai and Abu Dhabi at a premium to help fund purchases in Italy, but the war-related slowdown disrupted those plans. At the same time, a broader increase in overall interest in Italian properties may be partly driven by foreign investors temporarily shifting focus away from the Gulf region. “The requests are no longer from the Emirates but they are from the US, from England, from France,” Rossi said. “People who maybe before were looking at Dubai and now they are pausing that and thinking about Italy.”

This shift is primarily affecting properties priced under $500,000, while a much smaller group of Gulf citizens has historically purchased high-value Italian homes exceeding $1 million.

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