The iconic Grand Paris infrastructure project was a pivotal factor in a record €42 bn of real estate investment transactions in France last year, global data provider Real Capital Analytics’ European Capital Trends 2019 research shows.
The French capital also overtook London for the first time in 2019 to debut as the largest metropolitan market in Europe by value of deals. Total real estate investment transactions in France were €41.6 bn in 2019, 7% higher than in 2018 and a new record.
More than €7 bn was spent in the Paris office market in the last three months of 2019, contributing to a total of more than €20 bn in this property sector for the year overall. Parisian offices were Europe’s number one real estate asset class by deal volume in 2019 with cross-border buyers accounting for more than 50% of transactions. South Korea investors were the biggest cross-border source of capital.
Tom Leahy, RCA’s senior director of EMEA Analytics, said: 'Paris has received a huge boost from the Grand Paris infrastructure plan, as domestic and international investors position themselves in advance of the first set of major station openings on the network in 2024.
'Parisian offices became Europe’s largest single property investment sector last year, with 50% of the capital coming from overseas, and South Korean investors alone spending €4 bn on these assets. The strong competition and high prices being paid in Paris also appear to be playing a part in diverting domestic investors to other centres with resilIent occupier sectors, notably France’s second largest commercial real estate market Lyon, where investment volume doubled in 2019 compared with the previous year.'
The top buyers in the French market in 2019 were:
1. Primonial REIM
3. SCPI Priopierre
The largest single-property deals in the French market in 2019 were:
1. Lumiere in 12th arrondissement - acquired by joint-venture between Hanwha Investment, Samsung SRA and Primonial REIM for €1.2 bn.
2. Tour Majunga in La Defense - acquired by Mirae Asset and Amundi for €850 mln.
3. Crystal Park in Neuilly-sur-Seine - acquired by La Francaise on behalf of Samsung Securities for €691 mln.