According to data from Savills the office sector continues to dominate investment volumes in France, representing 67% of total investment in the first half of 2013, up from 65% in H1 2012. The international real estate advisor records a total investment volume of €6.1 billion in France in this period, representing a decrease of 22% against H1 2012, with office transactions amounting to €4.1 billion (on €5 billion in H1 2012).
The firm finds that retail investments reached a volume of €1 bln (on €1.1 billion in H1 2012) and serviced properties (hotels, care homes, hospitals) recorded turnover at €0.6 billion against €1.4 billion in the first half of 2012. Industrial transactions are the only sector to record a year on year increase in H113 reaching €0.3 billion on €0.2 billion in H1 2012.
Marie-Josée Lopes, Head of Research at Savills France, says: “Buyers in France remain predominantly focused on well-located office assets which are perceived as stable investments. Overall transactional activity has slowed during the first six months of the year which we believe is mainly due to a lack of prime property available on the market, as well as a decrease in the number of larger deals.”
In terms of investors, domestic buyers account for 69% of turnover in the first six months of 2013 which, Savills suggests, is reflected by the decrease in deals of over €100 million, notably those realized by Qatari purchasers that boosted the market in 2012. Consequently, the share of deals in the €50 million to €100 million bracket increased, accounting for 26% of deals in H113, up from 13% in H112.
Boris Cappelle, Investment Director at Savills France, comments: “Local investors are very much leading the way in the French investment market with SCPIs and French investment funds particularly active. Going forward in the second half of the year we expect to see a return of international investors and larger deal sizes which are already under negotiation. We forecast the total investment volume in France will reach between €14 billion to €15 billion by year end, a little below last year’s €16.8 billion.”