French investment market hits €16.8 billion in 2012, reflecting 4.5% annual increase (FR)

French investment market hits €16.8 billion in 2012, reflecting 4.5% annual increase according to Savills, €16.8 billion of investment transactions were completed in France during 2012, marking a year-on-year growth of 4.5% and coming in above the 10-year average of €14.2 billion. The international real estate advisor attributes this unexpected rise primarily to the return of transactions above €100 million, partly due to an increase in the number of portfolio sales, from 14% to 36% year-on-year. The firm's data records 46 deals over €100 million in 2012, against 40 in 2011.

Boris Cappelle, head of investment at Savills France, says: "2012 was a surprisingly good year for the French investment market, which was boosted by the rise in transactions over €100 million as well as a few deals above the €500 million mark. This is mostly a result of ongoing activity from Qatari buyers interested in French trophy assets and portfolios. These portfolios include prime assets in all sectors located both in Ile-de-France and across the country."

Savills notes that the French office market continues to dominate activity, accounting for 62% of the total investment volume in 2012 and expects prime office yields to remain at 4.25%. Retail, industrial and serviced properties accounted for 18%, 5% and 15% respectively according to the firm's research. Of those investments directed at serviced-properties (which include hotels, student housing, care homes, serviced-apartments and leisure), 12.5% were concentrated in the hotel sector on account of several key transactions. These include the purchase of a portfolio of four French trophy hotels by Katara Hospitality for €750 million, 52 avenue des Champs Elysées for €515 million by Qatar Investment Authority and a portfolio of 167 French B&B hotels for €508 million by Foncière des Murs.

Marie-Josée Lopes, head of research at Savills France, comments: "The French investment market ended 2012 looking healthy. With ongoing interest from international investors and a number of significant deals already in the pipeline we expect the investment volume to reach between €6 to 8 billion by the end of H1 2013."

Source: Savills

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