Milan and Rome Office Market: Growing Importance of Quality Supply

According to JLL analytics, the Italian office rental market began 2026 with divergent trends in two key cities: Milan and Rome. In the first quarter, the total take-up volume slightly exceeded 100,000 sq. m, of which about 65,000 sq. m were in Milan and 36,000 sq. m in Rome. m - to Rome.

Overall, the data suggests that the market is becoming increasingly quality-oriented: demand is maturing and selective, while the supply of high-quality properties remains limited, especially in central areas.

Milan: Resilient Demand While Space Is Reducing

In Milan, the absorption volume amounted to around 65,000 sq. m, to which another 4,000 sq. m of sublease was added. This figure confirms the high level of activity, comparable to the same period in 2025 and exceeding the average values over the past five years. However, compared to last year, when the volume was approaching 100,000 sq. m. m, there is a slight slowdown.

The main reason was the lack of large transactions, as well as a significant decrease in the average area of leased offices - from approximately 1,200 sq. m to 750 sq. m. This reflects more cautious strategies of companies and the desire to optimize the used space.

Demand is increasingly concentrated on high-quality properties: about 65% of the absorbed space is in class A buildings. This trend is supported by stricter selection criteria, including construction quality, sustainability and a prime location.

The limited supply of premium properties continues to put pressure on the market: the average vacancy rate is 9.4%, but for high-class properties it decreases to 3.6%. As a result, rental rates continue to rise, reaching 820 euros per sq. m per year in the historic center and 780 euros in modern business districts. The share of transactions with rental rates above 600 euros/sq.m. per year is also increasing, already accounting for approximately 30% of the total volume.

From a geographical point of view, approximately 40% of demand is concentrated in central areas, primarily in the historic center. At the same time, semi-peripheral areas are strengthening their role, accumulating more than a quarter of all transactions, especially areas such as Farini-Isola and Porta Romana.

The main drivers of demand are professional services, including law firms, financial institutions and technology companies.

Rome: growth due to large transactions

In Rome, the picture is different: the office real estate market showed a noticeable acceleration. The absorption volume amounted to around 36,000 sq m, which is more than double the figure for the first quarter of 2025. The growth was driven primarily by four large transactions of over 5,000 sq m. m, including a significant transaction with the public sector.

As in Milan, the capital continues to see strong demand for quality properties, with Class A buildings accounting for 57% of total take-up. This confirms the increasing selectivity of tenants amid a limited supply of premium offices.

The central business district remains a key market segment, accounting for around 40% of transactions, while the EUR district stands out with the largest pre-let transaction of the quarter.

In terms of sectors, the services sector, particularly legal firms, is leading, as is public institutions, which continue to play a significant role in the Rome office market.

The vacancy rate remains low, below 7% overall and just around 1.5% for high-end properties. Premium rental rates are held at €610 per square metre per annum, with potential for growth in the short term.