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Real Estate Investment
Qatar Investment Authority
French Property Investing
According to a new report by real estate advisor Savills, foreign investment into French real estate is rising as major institutional buyers snap up trophy assets in the county. According to the report the trend, which mainly concerns Qatari buyers has pushed the number of transactions worth over 100 million Euros to 31 in the first 3 quarters of this year, up from 21 during the same period of last year.
According to the report foreign investors were responsible for 40% of real estate investment during the first 3 quarters of this year, up from 30% in the same period of last year. While Middle Eastern funds (mainly Qatari) were dominant with 15% of all transactions, investment from Chinese, Swiss, Swedish and Dutch investors also grew strongly during the period. In fact, Germans were the only ones pulling back from France, having made 8.5% of the investment in the first 3 quarters of 2011 they accounted for only 3% this year.
Savills also reported on the first transactions worth more than 500 million Euros since the crash began almost 5 years ago thanks to the wealthy Arab investors. Deals including the sale of 50-52 Champs Elysées for €500m (£400m), which was purchased by the Qatar Investment Authority, as well as the sale of four hotels (Martinez, Hôtel du Louvre, Concorde Lafayette and Palais de la Méditerranée), purchased by Katara Hospitality for €750m (£600m).
The report highlights that core investments continue to dominate investment in key European markets like France. In the case of France the office sector continues to dominate, with over 60% of transactions during the first 3 quarters of this year involving office properties. Retail wasn't even close at 22% of transactions. Meanwhile the report points to low but stable yields of around 4.5% in both the retail and office sectors in Q3, and predicts that this will continue through the year end.
Marie-Josée Lopes, head of research at Savills France, says: "Investors are continuing to focus on core assets in key markets such as Paris and Lyon. We are also seeing interest in big retail properties and hotel assets in regional markets."
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