Total returns on French property last year came in at 21.7%, the highest level since 1997, outperforming the 20.9% return from French equities and the very weak return of 0.9% on the French bond market. Real estate index provider IPD France said the performance was driven by strong capital growth of 15.3%, up from 8.8% in 2005. However, income revenue fell to 5.7% from 6.1% the previous year.

Total returns on French property last year came in at 21.7%, the highest level since 1997, outperforming the 20.9% return from French equities and the very weak return of 0.9% on the French bond market. Real estate index provider IPD France said the performance was driven by strong capital growth of 15.3%, up from 8.8% in 2005. However, income revenue fell to 5.7% from 6.1% the previous year.

For the sixth successive year, retail property led the sector, booking total returns of 23.7%. Last year also saw a strong recovery in office total returns, which jumped to 21.8% from 12.9% in 2005, as rental values increased by 3.6% compared to a dip of -0.9% in 2005.

IPD France's Christian de Kerangel noted that the figures make the French property market the second best performer in Europe, behind Ireland (with 27.2%), but ahead of the UK, which reported total returns of 18.1% last year.