ROME (ITALPRESS) – With public debt projected at 3 trillion euros in 2025 and 86 billion euros spent on interest in 2024, Italy needs to invest 80-100 billion euros annually for five to 10 years to achieve the growth, competitiveness and sustainability goals outlined by Mario Draghi in The future of European competitiveness report. However, a significant contribution could come from the regeneration of public real estate, in line with the Case Green Directive, with about 200 billion euros in net capital gains from the overall revaluation of public real estate assets. This is the finding of Deloitte’s report “Reducing Italy’s Public Debt by Valuing its Real Assets. Masters of our Destiny,” the study that starting with an analysis of Italy’s public debt investigates possible solutions that would allow the country to take back its destiny through self-financing.Privatization of liquid financial assets, such as the state’s holdings in listed and unlisted companies, could contribute to the optimization of public finance, but a more structural impact may come from investing in the country’s many real assets and natural resources, such as public real estate and infrastructure, through a full transformation and valorization of these assets.State real estate, estimated at around 300 billion euros, includes properties owned by the central state, but also those owned by local governments. These properties could be disposed of in the short term but with predictable large discounts, given the need for major regeneration and conversion. Instead, through a major regeneration intervention on public real estate, including renovation and energy conversion costs with CO2 emission targets in line with Green House Legislation, for a total estimated investment in the order of 500 billion euros would result in an overall revaluation of public real estate assets of about 1.1 trillion euros, with a possible net capital gain of about 200 billion euros and an average return on invested equity of 1.8 times.”The financing of regeneration and development interventions for the full valorization of state real estate says Claudio Scardovi, Senior Partner and Private Equity & Real Asset Leader at Deloitte and author of the report – can be done on a market basis, including through Public Private Partnership (PPP) instruments and involving the private savings of Italians, through institutional investors such as Pension Funds, Pension Funds, Foundations and also Insurance and other asset management operators.Assuming the extension of additional financial guarantees by the state, the investment opportunity could also be extended by direct investment to retail through Italian families and individuals. “The Italian public debt,” Scardovi adds, “today represents a constraint to the country’s growth and development, and the challenge to revive competitiveness, recalled by Draghi on a European scale, requires investing significant public and private capital. In order to invest in the country’s future, it is necessary to put in place the suspended accounts of the past, without, however, giving in to the easy temptation to give up the few remaining jewels in order to postpone the problem for a few months. “The reduction of public debt,” comments Francesco Paolo Bello, Deputy Managing Partner of Deloitte Legal, “passes through the regeneration, reconversion and valorization of the country’s real assets, which represent an element of solidity and unique potential that we often forget about and that we should rather pursue and highlight, starting with the state budget. The valorization of real state assets turns out to be a fundamental strategic option to be considered for the patrimonial and economic rebalancing of Italy’s balance sheet and an important source of financing for the high investments that are necessary to invest in a future of sustainable competitiveness. “This operation,” conclude Scardovi and Bello, “would allow not only to best realize the patrimonial value of public real estate, grasping multiplicative effects at the economic level because of the final direct and indirect impact on GDP, but also to seize other social and environmental objectives of public utility. In fact, a state-owned property located in the city center, which is poorly used and has insufficient operating costs to preserve its asset value, could go through a conversion for optimal use. This would certainly require an investment to be capitalized and additional recurring management charges, but it could increase its productivity and utility of use, reflected in the rent or asset value of the same.”
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(ITALPRESS).
