Investors see value in France

Its economy may be in the doldrums while others power ahead, its president plumbing new depths of unpopularity and its rich and go-getting leaving in droves, but investors are piling into French commercial property, says a new report.

The report from CBRE says that ?10.7 billion went into offices, retail and industrial property in the first six months of 2014, up 73% on the H1 2013 and the best start to a year since 2007. At that rate it could well be the highest in the EU.

This may seem counter-intuitive given that France’s economy is one of the worst in Europe but as Vincent Bollaert of Cushman and Wakefield told Reuters: “The investment market does not reflect companies’ financial health or the macroeconomic context. This is a long-term investors’s market with a lot of money.”

CBRE point out that rental yields in Paris’s business districts are around 4-4.25% and in La Defense (pictured, above) are 6.75%. This compares to 3.75% in some parts of prime London. Big deals have included the sale of Europe’s biggest office, formerly owned by Lehman Brothers who went bust in 2008.

There are also great deals to be had in Paris’s residential market, as Paris property finder Adrian Leeds told OPP: “Prime starts at around ?10,000 per square metre. Two years ago that was closer to ?11,500. So it has gone down a little bit. There is a glut of really big properties on the market at bargain prices because of all the millionaires who have left. There is lots of negotiation going on because they are not selling any more. Two years ago you had to walk in and say ‘I’ll take it!’ literally, or the person behind you would take it at full asking price. That’s not true any more”

http://www.opp-connect.com/01/08/2014/investors-see-value-in-france/