Under the Italian legal and regulatory framework, collective investment in real estate is primarily carried out through closed-ended alternative investment funds (“AIFs”).

Italian closed-ended AIFs may be structured in two forms:

• contractual funds, known as investment common funds (“fondi comuni di investimento”), which are a segregated pool of assets without legal personality. These funds must be managed and represented by an authorised management company; and
• corporate funds, represented by closed-end investment companies (“Società di investimento a capitale fisso” or “SICAF”), which are entities with legal personality in the form of a joint-stock company.

Both contractual AIFs and SICAFs may be established either as reserved to professional investors or as accessible to retail investors, with significant implications in terms of investor protection rules. In particular, reserved AIFs benefit from a substantially more flexible regulatory regime.

Italian law also provides for a specific regulatory framework applicable to real estate AIFs.

First, pursuant to Article 10 of Ministerial Decree No. 30 of 5 March 2015 (the “DM 30/2015”) AIFs investing in real estate assets – namely real estate, rights in rem over real estate (including those arising from finance lease agreements with a transfer-of-title nature and from concession arrangements), as well as holdings in real estate companies and units of other real estate AIFs (including foreign AIFs) – must be established in closed-ended form.

In addition, DM 30/2015 lays down specific rules for “real estate AIFs”, defined as those AIFs whose assets are invested in the above-mentioned real estate assets and rights for at least two-thirds of the fund’s gross asset value. This threshold is reduced to 51% where at least 20% of the fund’s assets are invested in securitisation instruments backed by real estate assets, real estate rights or mortgage-backed exposures.

In addition to real estate AIFs, the Italian legal framework theoretically permits the use of listed real estate investment companies (“società di investimento immobiliare quotate” or “SIIQ”), which are incorporated as joint-stock companies and governed by Law No. 296 of 27 December 2006. SIIQs do not qualify as AIFs and were designed to serve as the domestic equivalent of international real estate investment trusts (REITs). However, in practice, their adoption has remained very limited. This is primarily due to the greater rigidity of their regulatory requirements and the higher operating and compliance costs compared to AIFs, making them a less attractive option for investors and fund managers seeking flexibility and cost efficiency.

Outside the regulatory perimeter, real estate investments – particularly for club deals and, in general terms, in single-asset transactions – are typically structured through corporate vehicles, in the forms of limited liability companies (“società a responsabilità limitata” or “S.r.l.”) and joint stock companies (“società per azioni” or “S.p.A.”)

Yes. All the investment structures described in the answer to question No. 1 above are characterised by limited liability for investors, although the mechanism through which this is achieved differs depending on the legal nature of the vehicle.

With regard to contractual AIFs, under Article 36 of the Italian Consolidated Law on Finance (“CLF”), each fund constitutes a pool of assets that is fully segregated, for all legal purposes, from the assets of the management company, the depositary and each investor, as well as from those of other funds managed by the same management company. Obligations incurred in the name of the fund are satisfied exclusively out of the fund’s assets. In this framework, investors do not assume any direct liability vis-à-vis third parties for the obligations of the fund and their position is limited to that of participants in a segregated pool of assets, with an exposure confined, as a matter of principle, to the capital committed or invested.

For SICAFs, SIIQs and ordinary corporate vehicles (typically S.r.l. or S.p.A.), limited liability is achieved through the corporate form. These entities have legal personality, and their shareholders are not liable for the company’s obligations beyond their contribution. In addition, where a SICAF is structured with sub-funds, the CLF provides for segregation at compartment level, so that liabilities attributable to a given sub-fund are satisfied exclusively out of its assets.

The choice of a given legal structure does not depend on the real estate sector (residential, logistics, office, living or retail), but rather on the nature of the underlying assets and the applicable product rules. All the above mentioned structures can be used for all different real estate sectors.

The decision on whether or not to use a regulated structure depends on the specific characteristics of each project: in particular, an AIF structure will be used when the real estate investment project involves raising capital from a number of investors in order to invest it in accordance with a given investment policy defined for the benefit of those investors, i.e. when the characteristics of the investment vehicle place it within the category of AIFs.

As mentioned in the answer to question no. 1, pursuant to Article 10 of DM 30/2015, Italian AIFs whose assets are invested in real estate shall be established in closed-ended form. Consequently, Italian real estate AIFs have to be structured as closed-ended real estate funds or SICAFs, irrespective of whether the strategy is core, value-add or opportunistic.

As above indicated, Italian regulatory framework does not distinguish between different types of funds depending on the relevant investment sector.

Italian regulatory framework distinguishes between REITs (i.e. SIIQ) and AIFs. The distinction is based on the legal and regulatory frameworks applicable to the two different type of vehicles (please refer to the answer to Question 1). Italian real estate AIFs are required to be established in closed-ended form and are therefore typically structured as closed-ended funds or SICAFs. Conversely, Italian SIIQs do not qualify as AIFs; they are listed real estate companies subject to a separate corporate and tax regime.

The Italian regulatory framework also distinguishes between reserved and non-reserved AIFs. Italian reserved AIFs are designed for professional investors (as defined under MiFID) and for a limited category of non‑professional investors who meet specific qualitative and quantitative safeguards, including a minimum initial commitment, diversified depending on whether they invest through investment advice or portfolio management. From a regulatory standpoint, these funds benefit from a highly flexible regime, as they are not subject to statutory diversification, concentration or eligible‑asset limits; their investment policy, leverage and risk constraints are largely defined on a contractual basis in the fund rules. They can be characterised by drawdown mechanisms allowing the manager to call capital over time in line with investment needs, rather than requiring full funding upfront. As a further peculiarity, Italian reserved AIFs are not subject to authorisation by the competent Italian regulatory authority, while the relevant AIFMs are authorised under AIFMD Italian implementing rules.

The leverage of Italian real estate AIFs is calculated under the AIFMD framework, i.e., as the ratio between the AIF’s exposure and its net asset value, using the commitment method under Article 8 of Commission Delegated Regulation (EU) No. 231/2013, as expressly provided for under Title V, Chapter I, Section II, Paragraph 3.1.2 of the Bank of Italy Regulation on Collective Asset Management (“RCAM”). In that respect, Italy does not provide for a separate real-estate-specific/autonomous leverage formula outside the AIFMD regime.

Where real estate assets are held indirectly through non-listed companies or other special purpose vehicles (SPVs), the use of such structures does not, per se, exclude the relevant exposures from the leverage calculation, which must continue to be assessed at the level of the AIF in accordance with the AIFMD methodology. This approach is confirmed by the RCAM, which requires managers of funds making investments through wholly-owned corporate vehicles established for that purpose to comply, inter alia, with leverage limits, which are to be calculated also taking into account the underlying investments of such intermediate vehicles on a look-through basis.

At product-law level, additional constraints apply. Under Title V, Chapter III, Section V, Paragraph 6.2 of RCAM, non-reserved AIFs “may borrow, directly or through controlled companies, provided that the leverage of the undertaking, also taking into account the overall exposure in derivative financial instruments, does not exceed 2. Within such overall limit, real estate AIFs for which listing on a regulated market or on a multilateral trading facility is not envisaged may borrow, up to a limit of 10 per cent of the total net value of the fund, in order to make early redemptions in connection with new issues of units”. The leverage limit – which may not exceed the limit established under the RCAM – must be expressly disclosed in the relevant fund rules.

As regards AIFs reserved to professional investors, the Italian regulatory framework does not set a predetermined leverage cap. However, managers are required to define leverage limits for each AIF and to be able to demonstrate, on an ongoing basis, that such limits are appropriate and complied with at all times; such limits must be expressly disclosed in the relevant fund rules.

Yes, although Italian law does not impose a standardised obligation to disclose property-level performance metrics using internationally recognised labels such as net operating income (NOI), cap rates or occupancy rates.

Under the Italian framework, reporting for real estate AIFs is structured around periodic financial statements and detailed asset-level disclosures, rather than predefined KPIs. In particular, RCAM requires annual reports containing the calculation of the AIFs’ unit/share value, to be determined on the basis of property-by-property valuation. Such disclosure is based on key characteristics of each asset, taking into account both intrinsic and extrinsic factors, as better detailed in the answer to question No. 7.

In addition – as discussed more in detail under answer to question No. 8 – independent valuation experts are required to periodically assess real estate assets and determine their value in accordance with applicable valuation criteria, which inherently take into account factors such as the use of the asset, its income-generating capacity and market conditions, including, where relevant, lease terms, tenants and related guarantees.

From a functional standpoint, therefore, the Italian regime ensures a high level of transparency at asset level but does not mandate a uniform set of performance metrics expressed in standard market terminology.

With regard to funds targeting institutional or international investors, the relevant AIFMs often supplement the statutory reporting framework with customary real estate KPIs (such as NOI, occupancy rates or yield metrics) in investor reports or marketing materials. However, this remains a matter of market practice rather than a specific regulatory requirement.

The Italian legal and regulatory framework does not provide for a separate disclosure regime built around a choice between mark-to-market and cost for real estate AIFs.

Under RCAM, real estate assets are periodically valued at “current value”, i.e. the price at which the asset could reasonably be sold on the valuation date. Such valuation reflects the key characteristics of each asset, taking into account both intrinsic elements (such as construction quality, state of repair and location) and extrinsic factors (including the possibility of alternative uses, legal or regulatory constraints and broader economic conditions, such as current and prospective real estate market trends in the relevant area). The current value may be determined as follows:

• where reliable comparable data are available, by reference to recent sale prices of similar properties, appropriately adjusted to reflect factors such as timing, physical characteristics, condition, income profile and tenant quality;
• alternatively, by applying income-based methodologies, taking into account rental income and lease terms, including the projection and discounting of future cash flows using an appropriate discount rate reflecting low-risk returns and asset-specific factors; and
• finally, by reference to replacement cost, i.e. the cost of rebuilding a similar asset, adjusted for depreciation and obsolescence and increased by the value of the land.

Title V, Chapter IV, Section II, Paragraph 4 of RCAM provides that, for the valuation of real estate assets and real rights in rem over real estate in which the fund’s assets are invested, as well as holdings in unlisted real estate companies, the AIF manager must rely on independent experts meeting the requirements set out in DM 30/2015.

In particular, independent experts may be either natural persons or legal entities appointed by the AIF manager, provided that they meet specific professional and integrity requirements and are supported by an organisational structure appropriate to the mandates they undertake. They must also be independent from the AIF manager, meaning that they must not be in a position involving personal or corporate relationships that could give rise to conflicts of interest or otherwise compromise their independence.

The appointment of an independent expert has a maximum duration of three years and may be renewed only once. Following termination, the same expert may not be reappointed in respect of the same assets of the relevant AIF unless at least two years have elapsed.

As indicated in the answer to question No. 1, pursuant to Article 10 of DM 30/2015, Italian AIFs whose assets are invested in real estate assets must be established in closed-ended form. Accordingly, Italian real estate AIFs are structured as closed-ended funds or SICAFs.

RCAM provides that the fund’s net asset value must be determined at least with the same frequency as the calculation of the unit value, and that, for closed-ended AIFs, the calculation and publication of the unit value must occur at least annually, or in case of new issuances or early redemptions of units/shares. The fund rules must also specify the relevant calculation frequency.

Accordingly, for Italian real estate AIFs, valuations must be performed at least annually and more frequently where required by the fund rules or in connection with new issuances or early redemptions of units/shares.

As indicated in the answer to question No. 1, pursuant to Article 10 of DM 30/2015, Italian AIFs whose assets are invested in real estate assets must be established in closed-ended form.

As indicated in the answer to question No. 1, pursuant to Article 10 of DM 30/2015, Italian AIFs whose assets are invested in real estate assets must be established in closed-ended form.

As above indicated, Italian AIFs whose assets are invested in real estate assets must be established in closed-ended form.

Under Italian law, closed-end AIFs may have more than one offering period and that, in the case of offerings subsequent to the first, existing participants must be allowed to apply for early redemptions of quotas/shares in connection with new share issuances. In such case, the fund’s rules shall specify the criteria by which requests are processed in the event that redemption requests exceed new subscription requests.

The fund’s rules can provide for the possibility to take out loans for the purpose of making early redemptions. With regard to non reserved Italian AIFs, this is allowed in connection with new quotas/shares offerings up to a maximum of 10 percent of the fund’s total net asset value.

Furthermore, pro-rata partial redemptions in connection with divestments are also allowed, provided that it is specified in the fund’s rules.

Beyond the closed-ended nature of Italian real estate AIFs, Italian law imposes a number of product-level constraints with regard to Italian non-reserved AIFs only.

With regard to such AIFs, RCAM contains specific prudential limits. In particular, the fund may not invest, directly or through controlled companies, more than 20% of its assets in a single property having unitary urbanistic and functional characteristics and capable of being sold separately. That limit rises to 33% for leased properties, provided the first tenant (including its group) does not account for more than 20% of total annual rental income. RCAM also provides that direct or indirect investment in real estate companies whose corporate purpose includes construction activity is capped, for real estate funds, at 10% of total fund assets; and it expressly states that, in managing a closed-ended AIF, direct construction activity is not permitted.

As to leverage – as already indicated under answer to question No. 5 – RCAM provides for real estate AIFs that borrowings may be incurred, directly or through controlled companies, provided the vehicle’s financial leverage does not exceed 2, taking into account derivative exposure as well. Within that overall cap, unlisted real estate AIFs may also borrow up to 10% of NAV to fund early redemptions connected with new issuances.

With regard to reserved AIFs, RCAM only requires that the AIF’s portfolio is invested in accordance with a degree of risk spreading consistent with portfolio optimisation, and the fund rules must set, among other things, the fund’s investment limits and leverage limits. The fund manager must be able to show that those limits are reasonable and complied with at all times. This provision does not preclude the establishment of closed-end Italian investment funds that invest in a single asset, for example in development projects or for the purpose of enhancing the value of existing real estate, provided that the resulting risk characteristics are clearly disclosed.

Italian AIFs rules do not impose general geographic-diversification requirements or fixed property-type allocation caps of general application. Such profiles are generally left to the fund rules, particularly for reserved AIFs.

According to Italian law, the management of AIFs is a reserved activity and may only be carried out by entities duly authorised according to AIFMD and supervised by the Italian regulatory authorities. Particularly, management of real estate AIFs (established in Italy or in other jurisdictions) is reserved to authorised Italian management companies (“società di gestione del risparmio” or “SGR”), incorporated as joint-stock companies, as well as to SICAFs acting as self-managed AIFs. EU AIFMs may also manage Italian real estate AIFs on a cross-border basis, subject to the applicable AIFMD passporting and notification regimes.

Authorisation is granted by the Bank of Italy, which is responsible for prudential supervision on asset management company. Authorised managers are also subject to ongoing requirements relating to capital, organisational structure, governance, risk management, compliance and AML.

There is no specific standalone licensing regime for real estate advisers as such. The regulatory analysis is functional: where an adviser merely provides advisory services, it does not require authorisation as an AIFM; however, if it performs activities that qualify as portfolio management (even in force of a delegation granted by an AIFM), such activity can be carried out by authorised managers only. In such case, the AIFM retains ultimate responsibility for the management of the funds.

As regards the AIF itself, the answer depends on the relevant legal form. Contractual non-reserved AIFs’ rules are authorised by the Bank of Italy prior to commencement of operations. Conversely, no authorisation is required with regard to Italian reserved AIFs.

With regard to SICAFs, a distinction must be made between self-managed and third-party-managed SICAFs. A self-managed SICAF is itself an authorised and regulated manager and must therefore obtain authorisation as an AIFM, according to Italian rules implementing AIFMD. Conversely, third-party- managed SICAFs’ rules are not authorised by the Bank of Italy nor by other authorities; at the same time, the relevant AIFMs are authorised by the Bank of Italy according to Italian rules implementing AIFMD  and are subject to regulatory oversight.

Under Italian law, there are no different tiers to regulation applicable to Italian funds based on the size of the fund.

While different regulatory tiers exist with regard to AIFM. They are driven primarily by the size and legal characteristics of the AIFs they manage.

The main distinction is between full-scope authorised AIFMs and sub-threshold managers. AIFs managers are qualifies as “under-threshold managers” where their assets under management do not exceed EUR 100 million or, if the portfolios are unleveraged and investors have no redemption rights exercisable for five years from initial investment, EUR 500 million.

While for full-scope managers the ordinary authorisation regime applies, together with the full set of prudential, organisational, governance, risk-management and conduct rules, sub-threshold managers are subject to a lighter regime.

A recent reform of the CLF has however introduced an important innovation: the existing category of sub-threshold managers is being replaced by the new category of “registered sub-threshold managers”.  According to the amendment to the CLF, registered under-threshold managers will be subject to a lighter supervisory regime and to registration, rather than a full authorisation.  At the same time, such managers will be allowed to carry out exclusively collective asset management and activities strictly connected or instrumental to it; they will not be permitted to manage open-ended funds, externally managed SICAVs or SICAFs, EuVECA or EuSEF, nor to establish master-feeder structures. Please consider that, to date, the secondary implementing rules are still to be issued by the Bank of Italy.

According to Italian law, the appointment of a property manager or asset manager for a real estate fund is typically structured as an outsourcing of functions on a contractual basis.

A property manager is generally entrusted with day-to-day real estate operations, such as lease administration, maintenance, service charges, tenant relations and technical oversight. Conversely, asset managers are typically involved at a higher strategic level, supporting the fund manager in value-enhancement initiatives, business plans, repositioning, leasing strategy, disposals and, more generally, the management of the real estate portfolio. In any case, the qualification of contracts with property and asset managers as outsourcing or not shall be verified upon a case-by-case basis, in light of the specific activities contractually assigned by the AIFM to the property/asset manager.

Under the Italian framework on outsourcing of essential or important operational functions and the AIFMD delegation rules, the fund manager may outsource functions, but only if this does not result in it becoming a mere “letter-box entity”, and only if it retains effective oversight, decision-making power and responsibility. The delegate must be selected with due skill, care and diligence, must offer sufficient guarantees of professional capability and organisational adequacy, and the fund manager must be able to monitor the outsourced activity on an ongoing basis.

Under the Italian legal and regulatory framework, the following service providers are required:

• an authorised manager (typically an SGR or a self-managed SICAF), responsible for portfolio and risk management;
• a depositary bank, responsible for safekeeping, cash monitoring and oversight functions, which must be appointed under a written agreement for each fund;
• independent experts (as described under answer to question No. 8), responsible for the valuation of real estate assets of the fund; and
• an statutory auditor (audit firm), responsible for auditing the fund’s financial statements and ensuring the reliability of the accounting information.

Property managers and asset managers are not required under Italian law, but they can be appointed by the AIFM on a voluntary basis. The contractual relationship between the AIFM and the property and asset managers can fall into the scope of application of outsourcing rules, depending on the extension and contents of their mandates.Please also refer to the answer to question No 17.

Under Italian law, the requirements differ depending on the entity concerned.

Italian law imposes that fund managers authorised in Italy must be established in Italy. SGRs and self-managed SICAFs must have their registered office and head office in Italy and are subject to authorisation by the Bank of Italy, which assesses, inter alia, their organisational structure, governance, internal controls and operational capacity. Italian AIFMs can launch and manage Italian AIFs or other Member States AIFs, according to AIFMD rules.

With regard to AIFs, Italian SICAFs must have their registered office and head office in Italy, while there is no concept of residence for Italian contractual funds, since they do not have legal personality (in any case, an AIF is considered as an Italian fund when Italy is its country of origin pursuant to Article 4 (1), p), of AIFMD).

As regards property managers and asset managers, there is no specific local residence or licensing requirement as such. As further indicated in answers to questions Nos. 15 and 17, they are not subject to any specific regulatory regime.

For Italian-domiciled real estate AIFs, the relevant framework is essentially the AIFMD regime, as implemented in the Italian regulatory framework. There is no separate real estate specific gateway for foreign managers as such. An EU AIFM may manage an Italian AIF, including an Italian externally managed SICAF, using the AIFMD passport. According to Italian AIFM implementing rules, the home Member State authority must notify the Bank of Italy; for the management of Italian AIFs, such notification must include, inter alia, the arrangements with the depositary bank of the fund and evidence that the EU AIFM is authorised in its home State to manage AIFs of the relevant type. The EU AIFM must comply with the Italian rules applicable to the AIF, while organisational and prudential supervision remains primarily with the home authority.

With regard to non-EU managers, even though CLF expressly contemplates the possibility for them to manage and market Italian AIFs, the Bank of Italy implementation rules have not been issued yet. In the absence of an operational third-country regime, a third-country manager cannot, at present, directly manage Italian AIFs.

A foreign adviser does not, merely by acting as such, require authorisation to advise an Italian real estate AIF. Please refer to the answer to Question 15 with regard to advisers.

There is no statutory or uniform market standard for management fees in Italian real estate funds, while they are determined contractually in the funds’ rules. Available public information suggests that annual management fees typically fall within a range of approximately 0.70% to 1.50% for reserved AIFs (with downside deviations occasionally observed below this range) and 1.5% to 2.5% for non-reserved AIFs.

Fees may be structured in different ways, including flat rates, tiered mechanisms decreasing with assets under management, or combined with minimum annual amounts. The economic impact of the fee depends not only on the percentage but also on the calculation basis (e.g. NAV, gross asset value, acquisition cost), which may significantly affect comparability across funds.

As to whether fees vary by sector or investment strategy (core, value-add, opportunistic), market practice suggests that more active or operationally intensive strategies may justify higher fees due to increased asset management complexity. However, there are no publicly available data that allow for the identification of a systematic correlation between fee levels and specific strategies or sectors.

Accordingly, while some variation exists in practice, management fees for Italian real estate funds appear to be driven by a plurality of factors, such as size, structure, investors’ profile and negotiation dynamics and the investment strategy alone.

There is no statutory or uniform market standard for carried interest in Italian real estate funds, but it is quite common that – with regard to real estate funds other than retail funds – funds’ rules provide for a carried interest for the fund management team, advisers, etc. Where adopted – more typically in reserved AIFs than in retail-oriented vehicles – carried interest is agreed contractually (in the fund’s rules) and generally follows a private equity-style waterfall.

Carried interest is usually structured as a share of profits, payable only after investors have received a full return of contributed capital plus a preferred return and a hurdle rate. The hurdle rates set forth in the different AIFs rules are not standardised and typically depend on the categories of investors and negotiation dynamics.

Catch-up provisions are in some cases included. Where included, they are typically structured in a more investor-protective manner than in some private equity models (for example, partial rather than full catch-up), reflecting the generally lower risk-return profile of many real estate strategies

Overall, the structure of carried interest is highly deal-driven and depends on factors such as investors’ profile and connected negotiation dynamics and strategy, rather than on a fixed market template.

There is no fixed statutory or market-standard management fee for Italian real estate funds, but it is not uncommon that the management fee level decreases upon completion of the investment period.

In some cases, the fee calculation basis varies after the end of the fund’s investment period from a basis consisting in the total fund’s participants investment commitments in the fund to a basis consisting in the net asset value of the fund or in the value of the fund’s assets.

With regard to real estate funds other than retail funds, it is not uncommon that investors seek a range of side letter protections, although there is no asset-class specific standard package. Typical requests include governance-related rights (such as the right to appoint or participate in an Advisory Committee), tailored representations and warranties from the manager, and provisions governing the use of the investor’s name, branding and confidentiality.

In side letters, a particular attention is often given to conflicts of interest (including with affiliated service providers or co-investment structures) and to alignment of interests in asset management and disposal phases.

Overall, side letters provisions are highly bespoke and primarily driven by the investor’s profile, related negotiation dynamics and regulatory constraints, rather than by a uniform market standard specific to real estate funds.

Italian real estate funds may be marketed to retail investors. The investment in real estate funds is not uncommon with regard to non-reserved AIFs, provided that retail investors can also invest in reserved AIFs with certain limitations, such as minimum investment threshold (please also refer to the answer to question no. 4).

Italian real estate AIFs (here included non-reserved AIFs) must be established in closed-ended form.

An exception applies to participation in Italian reserved AIFs by members of the management body and personnel of the fund manager who fall within the category of retail investors. Under Article 14 of Ministerial Decree No. 30/2015, such persons may subscribe for units or shares in reserved AIFs managed by that manager even below the minimum subscription thresholds set out in Article 14(2) (which define the line between retail and professional clients). In this context, “personnel” includes employees and persons who otherwise operate on the basis of relationships implying their integration into the manager’s organisation, including relationships other than employment.

The regulatory requirements applicable to non-reserved real estate AIFs are stricter than those applicable to real estate reserved funds. In particular, real estate retail AIFs must comply with the rules applicable to non-reserved AIFs, including the relevant product rules and diversification limits. Furthermore, marketing to retail investors is subject to stricter conduct of business rules.

The Italian fund marketing framework does not impose a separate real estate fund marketing regime for sovereign wealth funds, public entities, pension funds or insurance undertakings as such.

At the same time, investors such as insurance companies and pension funds must invest in accordance with the specific regulatory rules applicable to them, in relation to their investment activity.

Managers of real estate funds are subject to a comprehensive set of sustainability‑related due diligence and disclosure obligations arising from the EU sustainable finance framework, complemented by national supervisory guidance.

The Regulation (EU) 2019/2088 (“SFDR”) requires AIFS managers to provide both entity‑level and product‑level disclosures on how sustainability risks are integrated into investment decisions and, where relevant, on the consideration of principal adverse impacts (“PAIs”). For real estate funds classified under Articles 8 or 9 SFDR, managers must provide detailed pre‑contractual and periodic disclosures on the environmental and/or social characteristics promoted or sustainable investment objectives pursued, including application of the do no significant harm (DNSH) principle and good governance safeguards.

From a due diligence perspective, while EU legislation does not impose a standalone or formally labelled sustainability due diligence obligation on AIFMs, managers in practice conduct sustainability‑related due diligence in order to comply with the AIFMD framework as enhanced by SFDR principles. Such processes are essential to integrate sustainability risks into fund management, to identify and map potential ESG‑related conflicts of interest, and to ensure that the risk management function adequately captures AIF exposure to sustainability risks throughout the investment lifecycle.

As a result, managers of real estate funds face ongoing obligations to ensure continuous alignment between ESG policies, asset‑level due diligence, portfolio management and sustainability disclosures.

There is no standalone Italian regime imposing energy efficiency or carbon footprint disclosure obligations specifically on real estate funds as such. Rather, any mandatory reporting derives primarily from the EU sustainable finance framework.

In particular, AIFMs are subject to disclosure obligations under SFDR, including disclosures on sustainability risks and, where applicable, on PAIs. For real estate investments, the relevant PAI indicators include, among others, greenhouse gas emissions generated by real estate assets and the energy consumption intensity of buildings.

Accordingly, such disclosures may be mandatory in practice, but only where the fund and/or its manager fall within the scope of SFDR requirements (including, where relevant, Article 8 or Article 9 products), rather than as a result of a specific Italian regime applicable to real estate funds.