WORLDVIEW : FRANCE
4Q2020 Cap Rates
�O� �ro�th in �rice �er S��are Foot As of 4Q2020
Office |
+ 9.3 % |
Industrial |
+ 0.4 % |
Retail |
-1.5% |
Office
4.7 %
Industrial
6.3 %
Retail
4.9 %
��2020 �rice �er S��are Foot
Office $ 668
Industrial $ 108
Retail $ 529
YOY Growth in Deal Volume
|
As of 4Q2020 |
|
Office |
Industrial |
Retail |
-28.3 % -45.8 % -33 . 6 %
Deal Volume 4Q2019-4Q2020
Office $ 22.87 billion
Deals Priced $ 10M and Greater
Industrial
$ 4.91 billion
Retail
$ 4.11 billion
Data provided by Real Capital Analytics
It was just over a year ago when France was touted as the top European market for foreign investors , with over $ 48.22 billion being poured into commercial real estate in 2019 , according to BNP Paribas Real Estate . But once the pandemic hit , France experienced the same pains as countries all over the world .
Research by CBRE reports that investment decreased at a record rate in 1Q2020 and 2Q2020 before seeing some positive signs of recovery in 2H2020 , with more than $ 31.76 billion invested by year-end . While this figure represents a 32 percent year-overyear decrease , it ’ s tough to top the record year the country saw in 2019 . Moreover , 2020 investment volume was still higher than the 10-year average of $ 28.23 million .
Similar to banks in the U . S ., more restrictive underwriting of CRE in France through the banking system resulted in fewer mega-deals , both in terms of volume and number . As a result , CBRE reports that “ the average unit size [ fell ] from $ 50.58 million to $ 43.52 million . Transactions less than $ 117.62 million still represented more than half the total investment volume , thanks to Nexity ’ s sale of the Harmony building and URW ’ s shopping centers sale , for just over $ 1.18 billion each .”
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COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE SPRING 2021