2022-05-10-莱坊-Investment_market_-_France_Q1_2022_40页_5mb

Summary of Q1 2022 Investment Market in France

Core Content

The Q1 2022 investment market in France shows a mixed performance, with a 12% year-on-year decline in total investment volume, amounting to €14.6 billion, which is 36% lower than Q1 2020. The market was impacted by the ongoing health crisis and the war in Ukraine. The decline in activity is mainly attributed to fewer large transactions, with only 13 transactions exceeding €100 million compared to 15 in Q1 2021 and 21 in Q1 2020. Despite this, the market remains resilient, with a notable increase in retail and industrial investment.

Main Trends

• Total Investment Volume: €14.6 billion in Q1 2022, down 12% from Q1 2021 and 36% from Q1 2020.
• Transaction Volume: 186 transactions in Q1 2022, up from 165 in Q1 2021.
• Large Transactions: 13 transactions over €100 million in Q1 2022, down from 15 in Q1 2021.
• Portfolio Sales: 18% of total investment volume in Q1 2022, up from 17% in Q1 2021.
• Foreign Investors: Accounted for 47% of investment in Q1 2022, up from 44% in Q1 2021.
• French Investors: Dominated the market, particularly in office and retail segments, with 64% of office investment and 68% of retail investment.

Key Sectors

Offices

• Investment Volume: €2.2 billion in Q1 2022, down 45% from Q1 2021.
• Share of Total Investment: 47%, down from 76% in Q1 2021.
• Large Transactions: 6 transactions over €100 million in Q1 2022, down from 12 in Q1 2021.
• Prime Yields:
  • Paris CBD: 2.75%
  • La Défense: 4.00%
  • Lyon: 3.40%
• Market Dynamics:
  • A lack of supply and the shift to remote working affected the office market.
  • Core assets saw a decline in share, with value-added assets gaining more attention.
  • Activity concentrated in Paris, with lower vacancy rates and strong occupier demand.

Retail

• Investment Volume: €1.2 billion in Q1 2022, up 343% from Q1 2021.
• Share of Total Investment: 27%, up from 5% in Q1 2021.
• Large Transactions: 2 transactions over €100 million in Q1 2022, up from 0 in Q1 2021.
• Prime Yields:
  • High streets: 3.00%
  • Shopping centres: 4.25%
  • Retail parks: 5.00%
• Market Dynamics:
  • Retail parks saw a slight yield contraction (-25 basis points).
  • The market was boosted by the sale of 45% of "Carré Sénart" and other significant transactions.
  • French investors dominated the market, with 68% of investment volume, while foreign investors accounted for 32%.

Industrial

• Investment Volume: €1.2 billion in Q1 2022, up 16% from Q1 2021 and 108% from the ten-year average.
• Share of Total Investment: 26%, up from 25% in Q1 2021.
• Large Transactions: 4 transactions over €100 million in Q1 2022, same as Q1 2021.
• Foreign Investors: Accounted for 82% of industrial investment in Q1 2022, down from 97% in Q1 2021.
• Prime Yields:
  • Logistics: 3.25%
  • Light industrial: 4.00%
• Market Dynamics:
  • Logistics continues to be a major driver, with increased demand and pressure on prime yields.
  • The market is showing resilience, with activity focused on adapting to new demands and environmental standards.

Key Insights

• Office Market:

  • The office market experienced a significant decline, with a 45% drop in investment volume compared to Q1 2021.
  • The share of office investment in the total market decreased to 47%, the lowest since 2016.
  • Prime yields in Paris CBD remained historically low at 2.75%, while yields in La Défense and Lyon showed some stability.
  • The market is heavily influenced by the availability of core assets and the demand from occupiers.

• Retail Market:

  • Retail investment volume increased dramatically, with €1.2 billion invested, up 343% from Q1 2021.
  • The market is showing signs of recovery and reinvention, with a strong focus on shopping centres and retail parks.
  • The share of retail investment in the Greater Paris Region increased to 63%, highlighting the region's attractiveness.

• Industrial Market:

  • The industrial market maintained its dynamism, with €1.2 billion invested, a 16% increase from Q1 2021.
  • Logistics remains a key segment, with a 3.25% prime yield and a growing interest from investors.
  • The market is adapting to new demands and environmental performance standards, with a focus on value creation.

Outlook

• The office market is expected to remain cautious due to the ongoing impact of the health crisis and remote work trends.
• The retail market is likely to continue its recovery, driven by the demand for shopping centres and the resilience of the food sector.
• The industrial market is projected to maintain its momentum, with logistics and light industrial sectors leading the way.