REAL ESTATE MARKET TRENDS AND NEW LIVING MODELS

1. What are the main trends currently shaping the living real estate market in Italy?

Although traditional residential investment models continue to be the most commonly used in the Italian market, an emerging alternative model, the Built-to-Rent (BtR), seems to be able to address housing challenges by offering a flexible, sustainable, and high-quality alternative. It is a business structure that directly addresses key residential market demands by providing a new housing paradigm focused on quality, professionalization, and long-term stability.

2. How is changing the concept of “living” in Italy?

Italian concept of living is shifting from a fragmented, ownership-based model to a more institutional, service-oriented, and sustainable housing ecosystem due to the following main trends:

• affordability: the purchase of real estate has become increasingly difficult due to a combination of multiple factors. The average cost of real estate is constantly rising, especially in large urban centers. The increase in prices has not been accompanied by a proportional increase in wages, which have remained unchanged in Italy for decades. Furthermore, access to credit has become difficult and supply is unable to meet demand;
• labor market: constant tendency to move to large urban centers and workplace flexibility – temporary contracts and hybrid arrangements – are generating new housing needs, oriented towards rental, temporary, and adaptable solutions (e.g. build-to-rent, serviced apartments). The idea of purchasing a home to settle permanently in one part of the city is losing appeal among buyers;
• demographics: the Italian population is aging rapidly and the average household size continues to decrease, leading to rising demand for smaller, efficient housing units. At the same time, youth mobility is increasing, driven by education and work opportunities in large urban centers, fostering the growth of temporary and rental-oriented housing;
• sustainability: a combination of energy efficiency, high-performance insulation, and eco-friendly materials of the constructions, aimed at resources conservation and cost reduction

For residents, sustainability translates into lower energy costs, healthier living environments, and a stronger sense of community well-being. This shift reflects also the direction given by the recent European policy with regards to sustainability and related matters, both through tax incentives and EU directives. In this respect investors and developers are prioritizing low-impact construction, reuse of existing buildings, and urban regeneration instead of greenfield projects.

3. What are the real estate investment models mainly adopted in the residential Italian market?

a. Fractioning/Subdivision

Asset fractioning/subdivision is the main investment model for operators in the Italian real estate residential business.

It can be described as a process whereby a property (any kind of lands and buildings, greenfields, brownfields etc.) is: (i) purchased; (ii) developed and/or refurbished; (iii) if necessary, converted for a residential and commercial use, and (iv) divided and subdivided into several independent real estate units to be traded separately.

This investment strategy is designed for value-add optimization, leveraging asset repositioning to significantly enhance returns. Value is realized through the reconfiguration and modernization of the asset, followed by sale of individual units to multiple third-party buyers.

b. Build to Rent

An emerging alternative model for living in Italy is the Build to Rent.

It can be described as a process whereby a developer/investor: (i) acquires land or existing structures suitable for conversion; (ii) develops, constructs, or fully refurbishes a building complex composed of multiple units; (iii) leases all units to a single operational entity (OpCO) or manages them directly; and (iv) keeps ownership of the asset for a long term.

This investment strategy is designed for income generation and capital preservation, focusing on yield optimization through professional management and high occupancy rates. Value is realized not through the immediate sale of units, but through the stable, long-term stream of rental income.

4. Which operational and implementation traits are shared by the Fractioning/Subdivision and Built-to-Rent strategies? Operational insights

i. Title Risk: selecting the proper real estate asset.

The property must be both materially and legally eligible for subdivision purposes with no environmental issues. Furthermore, it must be connected or capable of being connected to infrastructures and utilities.

Before acquiring an asset, it is strongly advisable that a legal due diligence is conducted on, inter alia: the seller’s legal status, capacity, and solvency, the absence of co-ownership titles, public ownership rights, contractual or in rem rights of third parties, urban planning restrictions arising from zoning plans, landscape protection measures as well as any restrictions constraints provided by the law (e.g. Legislative Decree No. 42/2004 – Cultural Heritage and Landscape Code) that could limit the project.

ii. Acquisition: structuring options

Basically, two main structures can be implemented, each of them having different legal and tax implications:

a) Direct Purchase – Asset Deal: the investor can directly purchase the asset. This option may offer a simpler and faster transaction process, with lower setup costs and direct ownership of the asset. However, it exposes the investor directly to operational, tax, and legal responsibilities related to the property;

b) Purchase via acquisition vehicles: alternatively, the investor(s) may establish a special purpose vehicles acting as purchaser of the asset which shall be entitled to all rights and obligations connected to the transaction.

Vehicles commonly used in Italy for investment in real estate assets include both non-regulated vehicles and regulated vehicles. Commonly non-regulated vehicles for direct real estate investment in Italy are limited liability companies (S.r.l.) or joint-stock companies (S.p.A.). These entities generally operate as unlisted, private structures. Regulated vehicles can be, among the others, REIFs and SICAFs. Real Estate Investment Funds (REIFs) operate as collective investment undertakings, constituted under contract law, primarily deployed to aggregate capital to acquire a plurality of assets, execute large-ticket acquisitions, and mandatorily delegate the asset management function to specialized, licensed third-party entities.

SICAF (Società di Investimento a Capitale Fisso) is a statutory investment company with fixed capital. It represents a significant structural alternative to the contractual fund (REIF), as the SICAF is a regulated company that can manage its own assets internally (Self-Managed-Autogestita) but, alternatively, it also can be externally managed by a licensed third-party entity (Externally-Managed-Eterogestita).

The choice between the direct acquisition method (Asset Deal), a property-owning corporate entity (S.r.l. / S.p.A.), or a regulated collective investment scheme like a REIF or a SICAF depends, inter alia, on the strategy of the investment and the perimeter and number of the investors.

This selection is fundamentally driven by the transaction’s scale, complexity, source of funding, tax objectives, and regulatory requirements. While direct acquisition is straightforward, corporate and AIF vehicles provide frameworks for professional management, risk segregation, and specific tax advantages, particularly for institutional capital.

iii. Development Risks: development projects face a distinct set of legal and operational risks that directly impact project viability and returns. The complexity arises from the confluence of stringent administrative legislation (Town Planning), the strict liability regime of the Italian Civil Code governing construction contracts, and rigorous regulations related to safety at workplace enforced under Legislative Decree 81/2008.

Without prejudice to the traditional works execution risks attributable to the contractor (such as delays and quality of works), legal risk is broadly categorized into two principal and interlinked areas: Administrative Risk (encompassing Authorization and Planning Compliance, which covers permits and regulatory compliance) and Construction Risk (covering contractual execution, quality of the performance of the contractor, and the developer’s mandatory third-party and corporate liability).

a) Administrative Risk

The core risk is regulatory unpredictability stemming from a multi-layered legal hierarchy. The system is governed by a national statutory framework (Law 1150/1942, D.P.R. 380/2001 etc.), but its practical application is significantly influenced byspecific regional legislation – which creates material differences between regions – and the local municipal zoning regulations (Piano di Governo del Territorio  – PGTG). This layering of legislation at different levels requires simultaneous compliance checks across all three levels involved.

Administrative case law is highly relevant in this matter, given the conformative effect that administrative court rulings have on public and local entities and, consequently, on the interpretation of regulations applicable to the investors. Therefore, investors and developers must rely on a dynamic reading of legal compliance that integrates both statutory norms and evolving judicial precedents.

Project interventions require appropriate enabling titles (“Titoli Abilitativi”) or Planning Instruments. While many standard works rely on direct permits like the Permesso di Costruire (Building Permit) or certified declarations such as the SCIA and CILA, large-scale development projects often necessitate complex tools like Planning Agreements (Convenzioni) or detailed Implementation Plans (Piani di Intervento). This spectrum of instruments requires strategic engagement with the public sector.

b) Construction Risk

From a legal standpoint the relationship between the developer (committente) and the contractor (appaltatore), including all subcontractors, involves a regime of joint and several liability. The mandatory provisions of Section 1676 of the Italian Civil Code make the developer the ultimate guarantor for the contractor’s failures towards third parties, primarily its employees. Moreover, according to Article 29, paragraph 2, of Legislative Decree No. 276/2003, the developer is  jointly and severally liable with the contractor, as well as with each of the potential subcontractors, up to two years from the termination of the contract, to pay workers the wages that have been agreed with them, including severance pay (trattamento di fine rapporto), as well as the social security contributions and insurance premiums due in relation to the period of execution of the works contract. Moreover, Legislative Decree 81/2008 imposes a non-delegable organizational duty on the developer regarding general site safety. This necessitates the mandatory appointment of Safety Coordinators for both the design and execution phases. Non-compliance with the established safety framework exposes the developer’s legal representatives to direct criminal liability in the event of severe accidents or fatalities at the workplace.

Effectively managing this regulatory and compliance complexity necessitates the deployment of specific contractual mechanisms aimed at governing the developer-contractor. The combined and strategic use of specific contractual and procedural mechanisms (such as performance bonds, detailed penalty regimes, and strict payment verification procedures to proactively reduce risk) may contribute to stabilizing project timelines and protecting the investment’s financial viability.

5. What are the legal peculiarities of the Fractioning/Subdivision process? The Legislative Decree 122/2005 (TAIC)

To fully secure a transaction involving a fractioning/subdivision investment and to ensure a viable end-sale process, the developer’s risk mitigation strategies must be harmonized with the mandatory legal protections granted to final buyers by special legislation. This requires investors to factor the Legislative Decree 122/2005 (“TAIC”) into the project’s analysis. The Decree was introduced by the Italian legislator to rebalance the relationship between the developer and the purchaser in transactions involving the sale of properties that are still under construction.

6. What type of real estate fractioning/subdivision transactions fall within the scope of the Legislative Decree 122/2005 (TAIC)?

The TAIC applies to sale of assets commonly referred to as “under-construction” (immobili da costruire).

For the application of the TAIC the existence of two different requirements is needed:

a) Subjective requirement: concerning the parties to the agreement.

It is required that the seller is a professional developer acting in the course of business and that the buyer or promisor to purchase is an individual person (persona fisica) (i.e., non-professional buyer).

b) Objective requirement: concerning the object of the purchase.

This law applies to assets, not only residential buildings, for which a building permit has already been requested but the relevant construction works have not yet been completed at the time any binding commitment (such as the preliminary contract) is entered into.

7. What are the key provisions introduced by Legislative Decree 122/2005 (TAIC) to the benefit of the buyers of buildings under construction?

a) Notarial Preliminary Agreement (Section 6 of TAIC)

Any agreement concerning an asset falling within the scope of the TAIC, in order to be considered valid and effective, must be executed in the form of a preliminary agreement signed in front of a Notary Public, either as a Public Deed or a private document authenticated by the latter which shall be transcribed (i.e., officially recorded) in the Italian public properties registries (Conservatoria dei Registri Immobiliari). Transcription grants the perspective purchaser priority protection against third parties. In simple terms, according to Section 2645-bis of the Italian Civil Code, after the preliminary agreement has been transcribed any subsequent claim or lien registered against the property (e.g., a mortgage or a second sale attempt by the developer) will not affect the perspective purchaser’s right to buy the property.

b) Guarantee (Sections 2 and 3 of the TAIC)

The developer is mandatorily required to deliver to the purchaser, upon signing of the preliminary agreement, a guarantee (fideiussione) covering the total sum of all advances paid by the purchaser prior to the final sale. This instrument is specifically designed to grant the purchaser the statutory right of recovery of the prepaid amounts. Its effectiveness is strictly conditional upon the developer becoming insolvent, bankrupt etc.

c) Ten-year posthumous policy (Section 4 of the TAIC)

The developer must provide the purchaser with an insurance guarantee covering any material and direct damages to the property, including damages to third parties, arising from total or partial collapse of the building or serious construction defects due to soil or building faults in the form of a ten-year indemnity insurance policy (polizza decennale postuma) issued in favour of the purchaser, effective from the date of completion of the works and to be delivered upon transfer of ownership. This insurance strengthen the purchaser’s protection by securing the developer’s statutory liability for ten years under Section 1669 of the Italian Civil Code.

In this framework, these legal requirements have a significant impact on the overall structure and economic feasibility of real estate transactions. Consequently, the costs associated with the compliance with these statutory provisions (specifically, the premiums for the performance bond and the ten-year insurance) shall be adequately factored into the financial modeling and business plan from the earliest stages of project assessment.

8. Which is the most recent case law that impacted on the application of the Legislative Decree 122/2005 (TAIC)?

A recent decision of the Italian Supreme Court (Corte di Cassazione), Judgment no. 3817 of February 8, 2023, has clarified certain conditions governing the application and exclusion of the protections set out in the TAIC, establishing the following key principles:

a) scope of application

The TAIC does not apply to so-called “off-plan” or “paper sales” (vendite su carta), which concern properties for which no building permit or equivalent construction authorization has yet been requested.

b) definition of a completed property

A property is deemed “completed” not upon the issuance of the fitness for use certificate (Certificato di Agibilità), but when it is substantially complete and suitable for its intended use. What matters is the factual condition of the property, rather than the mere fulfilment of administrative formalities.

c) definition of renovation works

The TAIC does not extend to minor renovation works, that is, interventions which do not involve demolition, reconstruction, or changes in volume or surface area. Conversely, the Decree does apply where the renovation results in the creation of a new and distinct building, such as in cases of total demolition and subsequent reconstruction.

9. What are the main models of the new ‘hybrid living’ trend in Italy?

The integration of the aforementioned economic, legal, and operational factors is contributing to the evolution of new models, reshaping the concept of residential real estate use in Italy. This evolution is driven by the necessity to structure transactions that optimally balance the interests and needs of key stakeholders, namely investors and end-users. The models that have evolved in the Italian market, primarily Built-to-Rent (BtR) and, with less incidence, Rent-to-Rent (RtR), offer a structural response favoring flexibility and adaptability within the current living scenario.

Despite this market evolution, the Italian legislative framework still lacks specific legal provisions designed to facilitate the stable adoption of the BtR and RtR models.

10. What is the Built-to-Rent (BtR) model, and in what ways does it differ from the traditional Fractioning/Subdivision?

The BtR model structurally diverges from the traditional Fractioning/Subdivision model by shifting the core investment objective from asset disposal to multiple end-buyers to long-term asset retention and rental income generation. This paradigm change reflects a new concept of residential occupancy, aiming for the contractual enjoyment of property for a defined, limited period rather than permanent ownership. Therefore, this model necessitates the adoption of targeted design and construction techniques for real estate complexes specifically intended for long-term rental.  The viability of the BtR project is linked to the efficient management of the asset, which is achieved through a professional and specialized operation.

The property management function may be performed internally by the investor (i.e. by the PropCo), resulting in a concentration of operational risk, or delegated externally to specialized third-party operators or, most often, by a separate operational company (OpCo).

11. Which are the main functions and responsibilities of an OpCo?

The OpCo shall either possess or coordinate a comprehensive set of specialized functions starting from the development phase:

a) Integrated Strategic Asset Governance: including the professional administration of residential facilities supported by technological systems (g., digital platforms, specialized call centers), and the capacity to manage diverse residential lease (or sublease) agreements;

b) Value Chain Integration: aimed at coordinating the professionals involved in the development phase (general contractor, project manager) as well as managing the transition phase between construction completion and the commencement of operations (lease-up);

c) Service & Amenity Management: involving the management of the ancillary services (amenities) that serve as core differentiators of the BtR asset (g., coworking, dining, wellness facilities), and also integrating the Community Management function in order to maximize residents engagement and retention.

d) Core Operational Execution: covering the direct performance of the activities related to Leasing Management (commercialization), Property Management (technical oversight and administration), and Facility Management (services delivery).

While these functions often follow a tripartite structure involving external entities, institutional investors are increasingly opting for vertical integration, internalizing multiple roles in order to optimize asset performance and develop integrated, in-house expertise.

12. How are BtR projects typically structured under Italian law (ownership, leasing, management)?

BtR projects may present structural variability depending on the alignment between asset ownership and operational management strategy. The OpCo and PropCo entities may be structured in two primary ways: (i) within the same corporate group (vertical integration) or (ii) as completely independent, third-party entities.

The following analysis focuses on the legal relationship between the investor/owner (PropCo) and the operator/manager (OpCo), specifically detailing two different contractual models:

a) the Lease Agreement

The PropCo/OpCo relationship is governed by a master lease agreement. The lease agreement separates ownership (PropCo) of the asset from its right of use and enjoyment which is transferred to the OpCo. Depending on the specific type of contractual structure adopted (e.g., double net or triple net lease), it is possible to exclude the PropCo from the majority of the activities (and relevant liabilities) concerning the management of the asset.

This operational separation allows the PropCo to maintain focus on its core investment strategy, securing a de-risked income stream based on the collection of the lease payment. This stability may facilitate leverage opportunities and the optimization of the asset’s exit value. The OpCo, acting as a specialized vehicle, assumes full responsibility for managing the asset, including the possibility to structure community services and generate incomes through subsequent sub-leases with end-users.

Under Italian law, the lease agreement between the two entities is regulated by the Civil Code (Articles 1571 et seq.) and by special legislation based on the asset’s intended use: residential (Law 431/98) or non-residential/commercial (Law 392/78).

Despite their substantial differences in scope and application, both special legislations enable the PropCo to achieve the objective of securing stable income streams arising from a contractually predetermined payment. From an operational standpoint, the lease agreement model transfers (in full or for the vast majority) all operational and commercial risks to the OpCo, including market, vacancy, and management costs; consequently, the PropCo’s risk exposure is limited to the OpCo’s credit risk.

Conversely, the adoption of the lease agreement model entails specific risks from both a financial and legal perspective. Precisely, the PropCo faces concentration risk due to its exposure to a single contractual counterparty and a limitation of the control over the operation and maintenance of the building complex. From a legal perspective, the model is subject to stringent mandatory provisions. Specifically, Law 392/78 for non-residential/commercial assets (the application of which is subject to certain conditions, including an annual rent of an amount lower than EUR 250,000 and other specific minor conditions) imposes a minimum initial duration of 6 years, renewable for further six-year periods on the same terms and conditions, with significant restrictions on the landlord’s right of non-renewal at the end of the first 6-year term. Furthermore, it grants the tenant pre-emption rights upon sale and new lease of the asset and imposes to the landlord the obligation to pay goodwill indemnity upon lease termination. Similarly, Law 431/98 for residential assets provides for a minimum duration of 4 years, renewable for a further four-year term on the same terms and conditions, with restrictions on the landlord’s right of non-renewal similar to those analyzed above.

the Management Agreement

The Italian Civil Code does not specifically regulate a contractual form for real estate management. The underlying legal contractual type is the contract of mandate (Art. 1703 of the Italian Civil Code), which is structurally enriched by operational provisions derived from international market practice through a combination of the legal schemes stemming from, among other things, the construction and agency contracts. However, the contract of mandate establishes only the rights and obligations of OpCo and PropCo in the relationship with each other; it does not, in itself, confer upon the OpCo the power to act in the name and on behalf of the PropCo and to legally bind it vis-à-vis third parties. Consequently, the PropCo must issue specific Powers of Attorney (PoAs) in favour of the OpCo in order for the latter to execute the various activities required by the Management Agreement.

Through this model the PropCo entrusts the OpCo with the active management of the residential properties and services, retaining legal ownership of the asset and direct employment relationships. The OpCo is typically responsible for all operational aspects, including maintenance, marketing, staffing, and performance optimization, in exchange for a management fee structured with fixed and/or performance-based components. Given the atypical nature of the management agreement, it is also possible to provide provisions for active supervision by PropCo over the OpCo’s activities throughout the entire lease-up process to optimize the asset’s marketability to end users combined with several operational limitations (e.g. compliance with the budget, specific policies and financial thresholds).

This operational framework is typical of structures within the hospitality sector, ensuring specialized operational expertise is guaranteed while the owner maintains a passive investment role.

However, while the management model allows greater contractual flexibility in determining the relationship’s duration, the manager’s responsibilities, and activities, the Management Agreement structure entails specific legal and operational risks. The lack of specific legal discipline introduces uncertainty in dispute management, often requiring the application of general principles pertaining to the mandate, agency, and construction agreements. Notably, although formally structured as mandate agreement, the extensive operational control granted to the OpCo exposes the agreement to potential risk of re-classification by Italian authorities (tax or civil) into different contractual forms. Moreover, the PropCo remains the legal owner and principal of the BtR business, it retains liability vis-à-vis third parties (such as customers, employees, and suppliers), and therefore it is directly liable for all associated wages, social security, and tax contributions. As a consequence, this structure necessitates continuous monitoring by the PropCo to mitigate operational and legal exposure.

Finally, this structure entails the implementation of a sophisticated dual accounting and cash management system, requiring the establishment of separate operating accounts (bank accounts) in order to manage the continuous two-ways flow of money: inflows from end-users (tenants/end-users) and outflows for all operating expenditures (salaries, supplier payments, taxes, etc.). The PropCo shall ensure sufficient working capital is available to cover all these expenses. This funding obligation and mandatory separation of accounts significantly increase the PropCo’s administrative complexity and its immediate liquidity and financial risk as the primary source of working capital.

In conclusion, the PropCo/OpCo structure, when implemented through a management agreement, involves significant administrative and financial complexity and associated higher cost, which makes it best suited for large-scale real estate projects.

13. Can the BtR model be applied to different types of investment?

BtR is an investment and operational strategy that is not limited to standard residential development but is highly versatile across various categories of alternative asset classes. This model facilitates the management and expansion of large asset portfolios and focuses on generating long-term rental income through specialized, purpose-built structures. The most common investment segments adopting the BtR model include student housing, co-living (targeting young professionals and offering shared amenities), senior living (designed for the assistance and accessibility needs of the older population), and short-stay hospitality structures.

14. What is student housing? How does BtR work in the context of student housing?

Student housing is a specialized residential asset class designed, developed, and managed exclusively for university or college students. Optimal site location necessitates close proximity to educational institutions or access to efficient public transport infrastructure. Accordingly, this sector is also referred to as Purpose-Built Student Accommodation (PBSA).

PBSA differs from conventional residential real estate due to its highly specialized operational model. The operational requirements address the specific demands of student residents, which fundamentally differ from those of a conventional working tenant. Consequently, PBSA management requires the provision of tailored facilities and dedicated services. These elements typically include managed study areas, communal lounges, fitness facilities, and guaranteed high-speed data connectivity.

The BtR investment and operational model is directly applicable to the student housing sector. Its application to PBSA establishes a professionally managed rental structure designed to provide stabilized, long-term yields.

15. What is the legal, tax and urban planning framework governing the development of student housing facilities in Italy?

Even within the specific context of Purpose-Built Student Accommodation, a project may be structured utilizing the two principal operational agreements better analyzed above. Also in this case, a lease agreement secures a predictable, fixed rental income for the asset owner while transferring operational and financial performance risk to the tenant. On the other hand, a management agreement involves the owner appointing a professional operator to manage the asset on behalf of the owner. The operator receives a fee, typically calculated with reference to the business performance.

Notwithstanding the current and significant undersupply of student accommodation, the Italian legislator has not yet established a comprehensive and uniform national regulatory discipline applicable across its entire territory. The relevant legal and urban planning governance is therefore partially defined at the regional and local level. Within their respective legislative power, individual regional laws and local entities regulations have adopted specific measures governing both the urban planning and the authorization procedures for student housing developments and management. Notwithstanding the following general uniform rules, a student housing project requires prior comprehensive technical-legal assessment, because the required development and commercialization authorizations and licenses may vary significantly across the different Regions.

The development and operational structure of student housing facilities are currently structured within three main regulatory categories:

a) Private Student Housing: building complex developed and operated exclusively by private investor without public contributions or access to specific benefits and premium building rights. Consequently, the authorization process is comparable to a standard commercial transaction. Depending on the specific structural category, local municipal entities will most likely be the sole authorities involved in the required licenses and urban planning authorization. Urban planning classification is determined solely by specific local municipal regulations.

b) Contracted Student Housing (Convenzionato): projects implemented through the execution of an urban planning agreement (convenzione urbanistica) with the responsible Local Entity. Through this agreement, the Entity formally recognizes the social utility and public interest inherent in the development of the project. As a consequence, the developer is granted regulatory incentives, typically including increased building volume or reduced construction charges compared to a standard project. In exchange, the Entity requires the asset to be operated, for a long-term period, exclusively for activities related to student accommodation and the operator commits to apply uniform, predetermined, and financially advantageous fees for student residents.

c) Co-financed Student Housing (Law 338/2000 and PNRR): these projects are executed utilizing public co-financing and are subject to specific legislative acts. These measures establish mandatory construction standards, require the reservation of accommodation for students with financial needs, and dictate specific pricing policies. Moreover, this legislative framework introduces derogations from standard local urban planning provisions to facilitate accelerated housing supply expansion.

The differentiation among these three regulatory models illustrates the dichotomy within the Italian student housing sector, separating market-driven private development from publicly supported schemes designed to secure subsidized capacity and manage affordability.

16. How does BtR work in the context of the extra-hotel accommodation facilities?

Extra-hotel accommodation facilities (strutture extra-alberghiere) represent a segment of the non-traditional hospitality asset class. These facilities offer medium or long-stay accommodation and incorporate services typical of the hotel industry.

The Build-to-Rent (BtR) investment model is directly applicable to this sector. This market segment comprises various formats, including serviced apartments, aparthotels, short-stay residences, and other hybrid categories that effectively integrate the residential and hospitality sectors. BtR facilitates a professionally managed operational structure optimized to generate stabilized, long-term rental income from these assets.

17. What is the legal framework governing the extra-hotel accommodation facilities?

Extra-hotel accommodation facilities (strutture extra-alberghiere) are classified as a segment of the non-traditional hospitality asset class. They provide medium or long-stay accommodation and incorporate services typical of the hotel industry.

The operation of the asset is generally assigned to specialized third-party operators, utilizing either a management agreement or a lease agreement.

Therefore, the BtR investment model is directly applicable to this market segment which comprises various formats, including serviced apartments, aparthotels, short-stay residences, and other hybrid categories that effectively integrate the residential and hospitality sectors. BtR facilitates a professionally managed operational structure optimized to generate stabilized, long-term rental income from these assets.

In Italy, the extra-hotel accommodation activity is predominantly exercised through two principal regulated classifications: Tourist-Residential Complexes (RTA – Residenze Turistico-Alberghiere) and Holiday Homes and Apartments (CAV – Case e Appartamenti per Vacanze):

RTA: these are hospitality structures consisting of independent housing units (apartments or studio flats) situated within a single complex. These facilities are required to provide a mandatory range of centralized hospitality services, including reception, cleaning, linen change, and maintenance.

CAV: These are furnished residential units designed for temporary occupancy, characterized by the absence of centralized services typical of hotel operations.

The offer of this type of assets ranges from individual residential units to entire complexes, catering to tourist, business, or student accommodation requirements.

From a regulatory standpoint, both types of facilities are subject to the following requirements:

i. the operation is governed by specific Regional laws concerning tourism and accommodation;

ii. commencement of activity requires the submission of a SCIA (Certified Notice of Commencement of Activity) to the competent Municipality; and

iii. the required minimum structural and service standards vary according to the facility’s classification as either a CAV or an RTA, and these details vary across Regions.

The distinction resides also in the operational complexity and resulting fixed costs and the limitations on alternative use of the asset. The RTA model is structured to include the continuous provision of centralized hospitality services. This requirement directly translates into high fixed operating costs and greater management complexity, closely aligning the asset with hotel operations. Conversely, the CAV model provides significant operational flexibility due to the absence of required centralized services. This characteristic allows adaptability across various demand sectors and results in a reduced fixed operating cost profile. Please note that the newly issued (November 21, 2025) Council of State (Consiglio di Stato) ruling no. 9101/2025 (Section III) pertaining to the mandatory check-in procedures for extra-hotel accommodation facilities may have a significant impact on the operators’ business model and management protocols.

18. How does BtR work in the context of the silver living?

Given the demographic trends of an aging population, the BtR model is increasingly focusing on a specific segment: the silver housing sector, typically designed to individuals aged 65 to 85. Silver Living residences are specially designed for independent seniors who seek to improve their residential lifestyle by remaining active and engaged in their daily lives.

The core investment operation involves the development of innovative buildings equipped with fully independent apartments. These units are equipped with advanced technology and are complemented by a wide range of services specifically designed for senior citizens, with a strong emphasis on health, longevity, and socialization.

Similar to standard BtR models, Silver Living operations can be implemented through two established operating schemes: the long-term lease agreement or the management agreement. The OpCo typically enters into a series of service agreements with specialized third-party providers (i.e., companies that handle catering, cleaning, maintenance services etc.). However, the distinctive element of this sector is the contractual relationship with the senior resident.

This agreement is structured as a hybrid contract that includes hospitality and service provision. This means that the resident acquires more than just the right to occupy an apartment; in fact the contract grants the use of the unit along with a minimum services package.

The operation must ensure that the scope of services provided remains strictly within the bounds of general hospitality and assistance for an independent person. This is essential to avoid the regulatory classification of the entire property as a healthcare or dedicated assisted living facility. Such a classification would indeed trigger a considerably more burdensome regulatory framework, including stringent operational standards, and specific public licensing requirements for the operators, altering the nature and cost structure of the investment.