Wednesday, 9 September 2026
Rome’s office market is developing along a different path from Milan. While Milan’s current challenge is the scarcity of premium buildings in its most sought-after districts, the Italian capital is seeing another force shape demand: the unusually important role of government bodies and other public institutions. During the second quarter of 2026, public-sector organisations represented around 41% of office space leased in Rome. First-half activity also improved compared with the previous year, while investment in the city’s offices exceeded €400 million according to one major property adviser. Prime rents have moved above €600 per sq m annually, with estimates for the best central properties reaching approximately €620–€630.
These numbers point towards a potentially important change for Rome. Large government organisations require substantial amounts of accommodation, often for long periods, and their requirements increasingly extend beyond simply finding enough floor area. Energy consumption, accessibility, workplace standards, security, technology and the ability to accommodate large numbers of employees are becoming more important when selecting buildings. That creates an opportunity for a city with a substantial amount of ageing office stock.
Rome contains many buildings developed for working patterns that have changed considerably. Some require improvements to heating and cooling, façades, insulation, internal layouts and building-management systems. Others occupy good locations but need extensive work before they can compete with newer or comprehensively refurbished properties. The investment question is whether demand from public bodies can provide enough certainty for owners to undertake those improvements. Large refurbishment programmes require substantial capital and can remove buildings from the leasing market for extended periods, meaning investors need confidence that occupiers will exist when the work is completed.
A government department or public institution seeking several thousand square metres can materially alter that calculation. Large requirements reduce the dependence on assembling numerous smaller tenants, while longer occupancy periods can potentially create the predictable income sought by institutional investors. In the right circumstances, a major public tenant can provide the commercial foundation for a refurbishment strategy. Evidence from the first half of the year makes that possibility particularly relevant, with Rome’s leasing market including several comparatively large transactions and demand concentrated particularly in the central districts and the broader EUR area.
These two locations offer very different investment propositions. The historic centre commands the city’s highest rents and provides prestige, connectivity and proximity to national institutions. Yet its urban fabric creates limitations. Buildings can be smaller, redevelopment more complicated and the creation of large modern floorplates difficult. Planning restrictions and the historic character of individual properties can also make comprehensive upgrades expensive. EUR offers a different proposition. The district has a long association with major corporations and public institutions and contains larger office buildings capable of accommodating substantial occupiers, while rents remain considerably below those achieved in the central business district.
That rental difference could make EUR particularly important to Rome’s next refurbishment cycle. An owner able to modernise an existing building while keeping total occupancy costs below central Rome levels may be able to offer large tenants a combination of scale, quality and relative affordability that is difficult to reproduce in the historic centre. The challenge is that refurbishment economics remain highly building-specific. Improving an older office can require replacement of mechanical systems, upgrades to insulation and windows, modern lifts, redesigned entrances, improved common areas and extensive internal reconstruction. Energy performance can require particularly significant investment where buildings were designed decades before current efficiency standards.
The potential return therefore depends on the difference between the property’s existing value and what it could be worth after modernisation. A building in a strong location with suitable structure and sufficient scale may support extensive investment. Another property with inefficient floorplates, structural limitations or a weaker location may never generate enough additional rent to justify the cost. This creates a growing distinction between offices that can realistically be repositioned and those at risk of falling further behind.
Environmental requirements could accelerate that separation. Both public organisations and large companies face increasing pressure to occupy buildings that consume less energy and support broader sustainability objectives. Properties that cannot meet those expectations may gradually lose access to the strongest occupiers. The consequences extend beyond leasing because investors and lenders increasingly need to consider how much future expenditure an office will require and whether it will remain competitive over the life of an investment or loan.
Public-sector demand could help reduce some of that uncertainty. Long-term occupation by a government-related tenant can provide income visibility attractive to investors, particularly where substantial refurbishment has already been completed. This could encourage more institutional capital to consider Rome properties that previously involved too much redevelopment risk. It could also produce opportunities before refurbishment, as investors willing to acquire older buildings and undertake extensive improvement programmes identify properties where existing owners lack either the capital or expertise to reposition them.
Corporate occupiers remain an important part of this equation. Rome is not becoming exclusively dependent on government tenants. Large companies are also looking for efficient, accessible workplaces capable of supporting changing working patterns. In many respects, public and private occupiers are pushing the market in the same direction by concentrating demand on buildings that can provide modern standards at scale. If landlords must upgrade properties to compete for both government and corporate tenants, the leasing market itself can become an indirect mechanism for accelerating modernisation.
Not every building will make the transition. Some older offices may be technically difficult or financially unattractive to renovate. Others could eventually become candidates for residential, hospitality or mixed-use redevelopment where planning and building configuration allow it. A further group may remain lower-cost offices serving smaller occupiers that place less emphasis on premium specifications. Conversion adds another investment dimension, but Rome presents particular challenges because historic buildings, planning controls and complex ownership structures can restrict redevelopment. Changing an office to another use may also require substantial structural intervention, meaning continued office use can remain the most viable option even when extensive refurbishment is necessary.
The growing difference between central Rome and EUR should consequently be watched closely. The CBD offers scarcity and the city’s highest rents, while EUR provides scale and substantially lower occupational costs. Both can attract institutional investment, but for different reasons. The strongest central properties provide exposure to locations where replacement supply is inherently limited, while EUR can offer larger buildings and potentially greater scope for comprehensive repositioning, particularly where an occupier requires several thousand square metres under one roof.
Rome’s investment market is already showing that investors are prepared to deploy significant capital into offices. More than €400 million changed hands during the first half of 2026 under one major market measure, giving the capital a meaningful share of Italian office investment despite Milan remaining the country’s dominant institutional market. The next question is where that capital moves within Rome. Competition for already-modernised buildings can support pricing at the top of the market, but the potentially larger opportunity may lie in properties capable of being transformed.
Public-sector demand could become an important part of making those projects viable. Government agencies do not need to dominate the entire leasing market to influence investment decisions. A relatively small number of large requirements can provide sufficient scale to support substantial refurbishment programmes and demonstrate demand for modern accommodation. That makes Rome fundamentally different from a market driven primarily by headline rental growth. Its next office cycle could depend as much on the ability to modernise existing buildings as on constructing new ones.
If public institutions continue to represent a substantial source of demand, their influence could extend far beyond the leases they sign. By concentrating requirements on larger, more efficient and better-performing properties, they can strengthen the economic argument for owners to invest in ageing buildings. For Rome, the result could be a gradual transformation of its office market in which government demand, corporate requirements and institutional capital begin reinforcing one another. The critical issue will be whether enough older buildings can be upgraded economically to satisfy that demand.
If they can, the public sector may become more than one of Rome’s largest groups of office occupiers. It could become one of the forces helping to determine which buildings attract investment, which are modernised and which are ultimately left behind.
Source: CIJ.World Research & Analysis Team
