MILAN- Real estate investments in Italy dropped 32% to 3.5 billion euros ($4.2 billion) in the first half of 2020 due to the coronavirus pandemic and resulting lockdown, a study by financial services firm Duff&Phelps showed on Tuesday.

The office sector still accounted for more than half of investments but Duff&Phelps warned it could be challenged by the effects of smartworking on workplaces in the future.

The firm said hospitality properties and retail stores recorded the greatest declines.

Milan still accounted for the lion's share of investments, attracting 1.8 billion euros, stable compared to last year.

($1 = 0.8418 euros)

(Reporting by Elisa Anzolin; editing by David Evans) ((elisa.anzolin@thomsonreuters.com; 0039 0266129692;))