French property investment activity fell 54% to EUR 13 bn in 2008, from EUR 28.5 bn a year before, according to research published by Cushman & Wakefield.
French property investment activity fell 54% to EUR 13 bn in 2008, from EUR 28.5 bn a year before, according to research published by Cushman & Wakefield.
The 2008 figure is well below the average amount invested each year since 1998 (EUR 14.4 bn) and comes after four years of sustained growth in the market, the broker pointed out. The retail investment market was the hardest hit by the financial crisis, with investment activity dropping by as much as 77% in 2008. C&W said the financial crisis has struck a blow to large transactions, with just 35% of the total investment volume coming from deals of over EUR 100 mln, compared to 58% in 2007.
The Ile-de-France market still accounts for the highest share of total investments in the country, taking 73% of total activity in 2008. After a promising start to the year, investment markets in the provinces were progressively affected towards the end of 2008. Their performance (EUR 3.5 bn) was however sustained by the particular dynamism of several major cities such as Lyons and Toulouse.
US and foreign investors have withdrawn massively from the French market, with the exception of German open-ended funds. Market conditions have been favourable for equity buyers and French institutional investors especially. The latter, and notably the SCPI quoted property companies, along with pension funds and insurance companies represented 60% of investments in France in 2008 compared to 40% the year before.
