France enters new lending era

France is entering a ‘new era’ of finance for real estate projects with the arrival of a wave of non-traditional lenders despite ongoing concerns about deflation.

Speaking at the PropertyEU France Investment Briefing held in London earlier this week, Roland Fuchs, head of real estate finance France at German lender Helaba, said more and more new capital lenders are providing finance for projects and taking advantage of the frozen pipeline still hampering traditional sources.

The ‘mixed pool’ of lenders described by Fuchs includes insurance companies and banks teaming up to fund major French real estate developments. He added that with new lenders entering the market a tranche of opportunities for investors and developers is emerging.

‘More and more capital is being made available, even for non-core financing. The lack of core-plus and opportunity of financing deals in the market is more a result of the lack of investment opportunities in this area. As soon as investment opportunities and investors come back I think the finance will follow.'

But despite the positive signs, Taylor Wessing partner Alfred Fink said that confidence in France’s economic prospects remained fragile, with a lack of investment activity stoking fears of a potential deflationary crisis similar to the one seen in Japan.

‘There is money in the market, but there are people saying there’s a Japanese trend in the market, where everyone is sitting on their hands. There is a fear that that we could get into a deflation mood like Japan. But money is around, it’s not a question of lack of money or liquidity.'

The Investment Briefing was hosted by London City law firm Taylor Wessing and brought together a panel of leading experts on the French market to identify the next big opportunities for investment.