Retail investment in France, a record-breaking high of 35% in 2010 (FR)

With €6.9 billion transacted in the first nine months of the year, the French commercial real estate investment market has registered a 41% increase compared to the same time last year and has gained in momentum since its low point in 2009 when the total annual investment volume did not exceed €7.8 billion, according to Cushman & Wakefield.

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Prime high street shop yields stand at around 4.75% in Paris.

While offices are still the predominant asset type, they have lost market share. With €3.9 billion transacted since the beginning of the year, offices only accounted for 58% of market share compared with 67% in 2009. Retail assets now have the advantage, thanks to a wider range of potential buyers, greater available supply and yields having stabilized. Retail property continues to perform well, consolidating its increasing market share.

Market share of 35%
With a total of €2.4 billion invested so far this year, retail investments have increased more than any other real-estate investments and were up by 86% at the end of 3rd quarter 2010 in relation to the corresponding period in 2009, compared with 33% for office assets and 22% for industrial assets. Recognized as being a particularly safe option, retail assets continue to attract risk-averse investors looking for secure investments. Retail accounted for a record-breaking high of 35% of all property investments in France in the first nine months of 2010. Furthermore, retail continues to gain market share (35% in 2010, compared with 24% in 2009 and an average of 10% between 1999 and 2008). This trend is even more marked in the provinces where retail accounts for 66% of all property investments.

Strong increase in investment volumes due to the success of shopping centers
The fact that investors are looking for low risk, securely-let assets along with the increase in the supply of shopping centers, has meant that the share of shopping center investments in relation to all property investments has gone up considerably.

Thanks to higher supply, shopping centers and quality shopping arcades were the most sought after asset types, representing 59% of all retail investments (1.56 billion €). The success of shopping centers can mainly be put down to five significant transactions: Cap 3000 near Nice for €450 million, 51% of the shares in O'Parinor in Aulnay-sous-Bois for €223 million, 75 % of the shares in Espace Saint-Quentin in Saint-Quentin-en-Yvelines for €176 million, Les Vergers de la Plaine in Chambourcy for €110 million and the Saint-Martial shopping center in Limoges for €99 million.

These examples of sales and acquisitions demonstrate that investors are targeting existing shopping centers, securely-let and liquid assets, to the detriment of retail parks in particular, which are considered as a higher risk.

Appeal for international investors
The new market conditions have changed the balance of power, favoring the arrival or return of certain investors to a market which was previously inaccessible. The increasing number of quality opportunities on the market has helped attract international and long-te

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