Investment in commercial real estate in Paris is likely to surpass earlier full-year expectations of EUR 8-10 bn, with the current forecast put at EUR 10-11 bn worth of deals, according to Stephan von Barczy, managing director of French capital markets at Jones Lang LaSalle.
Investment in commercial real estate in Paris is likely to surpass earlier full-year expectations of EUR 8-10 bn, with the current forecast put at EUR 10-11 bn worth of deals, according to Stephan von Barczy, managing director of French capital markets at Jones Lang LaSalle.
‘Investment transactions amounted to around EUR 9 bn already at end-November, suggesting that there is potential for a volume similar to 2011, when a total of EUR 12 bn of assets traded in the market,' he told PropertyEU.
For 2012, market experts had envisaged a 20 to 30% drop in investment transactions following the termination at end-2011 of a tax break for vendors to SCPI and OPCI vehicles. However, Von Barczy said Paris remained at the centre of investors’ focus. 'Big international money is coming to Paris after having entered Europe with an investment in London,' he noted.
According to JLL estimates, sovereign wealth funds and other international institutional investors have accounted for nearly EUR 3 bn of deals so far in France. Remarkably, German investors have returned to the scene with around EUR 500 mln of acquisitions. Von Barczy: ‘French insurance companies are also very active, buying bond-like assets with long-term leases.’
While most deals have been in the core space, Von Barczy said there is also strong interest in value-added opportunities but investment has been constrained so far by the lack of product. ‘I have a long list of investors interested in secondary assets but there is just not enough product on the market.’
