Commercial Property Investment in France

When most people think about investing in property in France they imagine investing in residential property - particularly that which is ripe for the tourism market.  But of course that’s not all there is to property in France - and in reality France’s residential real estate market is currently playing second fiddle to its commercial market in terms of investment activity and potential returns.

In a recent survey entitled Emerging Trends in Real Estate (Europe) issued by the Urban Land Institute in association with PricewaterhouseCoopers, 400 of Europe’s leading property industry analysts all agreed that the commercial property market in Paris is actually the top real estate investment market in Europe and in this article we reveal the appeal of commercial property investment in France in general.

The commercial property market in Paris is extremely exciting and is likely to remain so for at least the short term.  Basically what’s so attractive about it is the fact that it manages to strike a key balance between offering property investors a low risk marketplace where high returns are possible.  In addition to this fact, because there is such a wealth of stock across a broad sector base there is a potential entry point for many more investors.

Paris has traditionally welcomed investment into its commercial marketplace from across Europe with Germany and Britain key players, it also still enjoys strong US investment commitment and recently it has seen an intensification of interest from Middle Eastern investors as well. 

Last year the commercial property market in Paris saw inward investment from Middle Eastern investors alone reach well over one and a half billion euros and in 2007 this figure could be far higher.  Middle Eastern investor activity has intensified of late because real estate in general has become higher profile as an investment commodity in the Middle East as regional nations seek to diversify their own economies away from their previous dependence on oil.

The one thing that really is testament to the transparency, security and ongoing appeal of commercial property in France is the fact that local French investment commitment in the marketplace in Paris and across France is actually the strongest and it tops US investment commitment by 15%. 

Currently Paris is head and shoulders above all other commercial property markets in Europe for investors looking to buy in – however because it is a highly priced marketplace other areas of France are becoming increasingly interesting to investors who like France’s general stability and transparency but who are not positioned to commit to Paris.  Lyon is a cheaper but attractive entry point especially for retail property stock for example.

Overall Parisian commercial property benefits from the fact that it is a low risk, high returning marketplace, i.e., it fulfils every investor’s ultimate objectives – in Paris there is a strong local economy which analysts believe the city can easily sustain and maintain for at least the short term, it has a lot of diverse property stock across the entire city and outer lying limits meaning investors can diversity across sectors and locations, there is transparency in the property market in general in France and investor’s assets and buying actions benefit from superior legal security in France…and what’s more, you can get up to 10% yields from the office sector and push that to around 13% if you target well located retail stock in Paris.

Special Reports: Property News for France

France a Guide to Buying Property
A comprehensive guide to the property buying process in France including legal and financial considerations

France for Property Investors
An introduction to France and its property market for would-be investors

France Investment Property Potential Guide
From leaseback to commercial property investment opportunities, we examine the potential for profit from property in France