Worldview

Worldview: France

Spring 2021

It was just over a year ago when France was touted as the top European market for foreign investors, with over $48.22 billion being poured into commercial real estate in 2019, according to BNP Paribas Real Estate. But once the pandemic hit, France experienced the same pains as countries all over the world.

Research by CBRE reports that investment decreased at a record rate in 1Q2020 and 2Q2020 before seeing some positive signs of recovery in 2H2020, with more than $31.76 billion invested by year-end. While this figure represents a 32 percent year-over-year decrease, it’s tough to top the record year the country saw in 2019. Moreover, 2020 investment volume was still higher than the 10-year average of $28.23 million.

Similar to banks in the U.S., more restrictive underwriting of CRE in France through the banking system resulted in fewer mega-deals, both in terms of volume and number. As a result, CBRE reports that “the average unit size [fell] from $50.58 million to $43.52 million. Transactions less than $117.62 million still represented more than half the total investment volume, thanks to Nexity’s sale of the Harmony building and URW’s shopping centers sale, for just over $1.18 billion each.”

Infographic data courtesy of Real Capital Analytics