Some €4.3 bn of commercial real estate was traded in Paris during the first quarter of 2015, up 10% on the same period last year, Savills has reported.

Some €4.3 bn of commercial real estate was traded in Paris during the first quarter of 2015, up 10% on the same period last year, Savills has reported.

The international property adviser predicts strong volumes for the remainder of the year due to healthy investor appetite for product.

Boris Cappelle, head of investment at Savills Paris, commented: 'We have seen a renewed interest from investors in commercial property thanks in part to the improved Eurozone economic outlook and a stronger financial climate. The strong Q1 results demonstrate a market that is refocusing on traditional assets and the jewels of the Parisian market, such as offices in Ile de France.'

Savills reports that office investment in Paris accounted for 86% of the Q1 2015 total compared to 73% in Q1 2014. The Western Crescent accounting for 46% of investment compared to 8% in Q1 2014 and investment in the CBD totalled 16% compared to 8% in Q1 2014.

The firm states that the majority of transactions in Q1 2015, at 63% or 16 deals, totalled between €100 mln and €500 mln, with no deals yet to exceed the €1 bn mark. The most noteworthy deal of the quarter was the acquisition of Ecowest by the sovereign fund Abu Dhabi Investment Authority for €477 mln.

The number of domestic investors grew from 33% in Q1 2014 to 45% this year according to Savills. Demand from international parties is expected to remain strong this year with activity totalling 55% of the market in Q1 2015, which is slightly down from 67% in Q1 2014. The most active international investors were from America and the Middle-East at 13% and 11% respectively.

Boris added: 'We anticipate an upsurge in foreign investment in France by the end of the year due to a more favourable currency exchange and with interest rates at their lowest levels. The Eurozone market is very attractive for international investors who see their purchasing power increase.

'Additionally, the European Central Bank is expected to continue to maintain the low interest rate policy which will create a gap between the levels of funding and favourable rates of return on investment in commercial property and service. France will therefore benefit from this even if there is a risk that there will be a lack of supply in the face of high demand.'