French investment rebounds in Q1

France has seen property investment jump 40% in the first quarter of 2013 to over €2 bn, according to data from Jones Lang LaSalle.

The broker expects the market will surpass the €12 bn mark in 2013, the best investment year since 2007.

Although dominated by local investors, the French real estate sector has also won over a string of new foreign players in the recent past, confirming the capital's status as the largest property market in the eurozone.

The State Oil Fund of the Republic of Azerbaijan (Sofaz) and the Bank of China are just two of the new players recently drawn to the market in a sign of the depth of the local property industry. The Chinese state-owned lender recently announced plans to open an office in France and said it has joined a consortium funding the construction of the 200-metre Incity Tower project in what is believed to be its first operation in the country. The funding partnership also includes the Banque Cantonale de Genève, and two key regional players, the Lyonnaise de Banque and the Caisse d’Epargne Rhône-Alpes.

‘We do see that there are various pockets of financing available from several different sources including debt funds, the traditional German mortgage banks, insurance companies and mezzanine providers,’ commented Stephan von Barczy, head of capital markets at Jones Lang LaSalle in Paris.

According to JLL’s data, the French property sector is sitting on a total of €12 bn of financing available for new investments. ‘Many vendors are preparing their sales programme, and there is a lot of product on the market at the moment,’ added Von Barczy. The broker has already closed €900 mln of deals so far this year, with a further €800 mln of assets under preliminary sales agreements and some €2.5 bn of real estate in the marketing process.