1 Asset Management to Develop 112-Room Luxury Hotel at Rome's Historic Teatro delle Arti

Lithuanian investment management firm 1 Asset Management has announced plans to convert the historic Teatro delle Arti building in Rome's Ludovisi district into a 112-room five-star hotel, marking the company's first investment in the Italian real estate market and what it describes as the largest Lithuanian-capital project in the country.

The development is being executed through the IAM Rome Prime Real Estate Development Fund in partnership with Italian fund manager Castello SGR, which manages more than EUR 1 billion worth of hotel assets across Italy. The hotel is expected to open in 2029, with the fund planning to exit the investment through a sale to a strategic investor following stabilized operations.

A Rare Real Estate Development Opportunity in Central Rome

The Teatro delle Arti sits in the Ludovisi district, one of central Rome's most prominent neighborhoods, adjacent to the Borghese Gardens and along the legendary Via Veneto — the street immortalized by Federico Fellini's film La Dolce Vita. The area is home to several high-profile hospitality brands, including The Rome EDITION, NOBU, W Rome, the Dorchester Collection, and the Excelsior Hotel, with a Mandarin Oriental also planned nearby.

The planned hotel will feature a restaurant and bar, spa and wellness areas, and a rooftop panoramic terrace with a vermouth bar and swimming pool. The building's former theater hall is slated to be repurposed as a multifunctional arts and entertainment space.

"I had been searching for a project that combines a prime location with the opportunity to create additional value through development. Projects of this type in central Rome are extremely rare due to heritage protection and urban planning restrictions, which limit new hotel development. These circumstances, together with Rome's position as one of the world's leading tourism destinations, have driven strong investor interest in the project," said Tomas Langaitis, partner at the IAM Rome Prime Real Estate Development Fund.

Rome's Luxury Hotel Market Draws Interest in Real Estate

The announcement comes against a backdrop of significant capital flows into Italy's hospitality sector. According to figures cited by 1 Asset Management, hotel investments across Italy exceeded EUR 2.5 billion in 2025 — a 19% increase over 2024 and 35% above the ten-year average. Rome accounted for EUR 630 million of that total, making it the country's most active hotel investment market.

Demand dynamics in Rome's luxury segment have also been favorable. Over the past decade, the number of luxury hotel customers grew approximately 24%, while overnight stays increased by roughly 75%, even as supply expanded only marginally. Average room rates at five-star hotels in the area frequently exceed EUR 700 per night, with some properties reaching above EUR 1,000.

Heritage protection regulations and urban planning restrictions have constrained new hotel supply in central Rome, a dynamic that 1 Asset Management cited as a key factor underpinning investor interest in development projects of this type.

Strategic Expansion Into Southern Europe

Alius Jakubėlis, CEO of 1 Asset Management, described the investment as a strategic step in the firm's geographic diversification beyond the Baltic states and Central and Eastern Europe.

"Rome is one of the most visited cities in the world, and the luxury hotel segment here is characterized by strong demand and limited supply, which gives such projects clear long-term potential. With many years of experience in hotel development and management in the Baltic states and the CEE region, this investment allows us to diversify our portfolio and respond to investors' interest in opportunities beyond Lithuania. It is an important strategic step for us in expanding into Southern Europe," Jakubėlis said.

The Ludovisi district's proximity to major landmarks — including the Trevi Fountain and Borghese Gardens — as well as the U.S. and Indian embassies, was cited by the firm as positioning the planned hotel to serve both leisure and diplomatic travelers.

Partnership With Castello SGR Anchors Local Execution

To manage execution in the Italian market, 1 Asset Management has partnered with Castello SGR, an Italian fund manager with extensive experience in the hotel real estate sector. Castello SGR currently manages more than EUR 1 billion worth of hotel assets across Italy.

The partnership is intended to help ensure the project stays on schedule and within budget, according to the firm. No financial terms of the investment were disclosed.

Following the hotel's anticipated 2029 opening, the IAM Rome Prime Real Estate Development Fund plans to allow operations to stabilize before executing an exit through a sale to a strategic investor.

Sources

1 Asset Management – 1 Asset Management to develop a luxury 5* hotel in central Rome (March 30, 2026)