French cross-border real estate investment at EUR14bn in 2020
Cross-border French investment into real estate totalled EUR14 billion in 2020, 13 per cent up on the previous year while French investment into French real estate declined by 15 per cent.
That's according to data released by Savills which reveals that French investors allocated some EUR2.4 billion to the Asia-Pacific real estate market last year, representing 17 per cent of all French cross border investments, a record high both in terms of volume and share. The different paces of economic recovery from the pandemic have highlighted some regional opportunities with Asia-Pacific forecasted to lead the cycle, hence offering faster growth prospects than other regions.
In Europe, Germany remained their preferred destination with EUR2.9 billion invested last year, followed by Italy at EUR2.2 billion and the UK at EUR2 billion, an increase of 71 per cent on 2019 and 95 per cent above the five-year average for the latter. The most active French investor globally by far is AXA, while in EMEA top investors also include Covivio, billionP Paribas, Primonial, Caisse des Depots and Amundi.
French cross-border investment into the residential sector totalled EUR3.9 billion last year, a record high and 206 per cent above the amount recorded in 2019. French appetite for cross border industrial properties also surged. The global volume French investors dedicated to logistics assets increased by 141 per cent yoy to EUR1.8 billion last year, mainly targeting the US, Japan, Italy, Germany, the Netherlands and the UK, according to Savills.
Tristam Larder, Joint Head of Savills Regional Investment Advisory EMEA, says: “French investors have increased their investment into the office sector in other countries recently and have been investing into the so-called alternative sectors for many years, both in France and cross border. With many institutional investors overexposed in France and prime yields for Paris CBD offices standing at 2.75 per cent, a record low, we anticipate the high levels of outbound capital to continue this year.”
Lydia Brissy, Director European Research at Savills, says: “French investors will continue widening their scope globally throughout 2021. The amount of money to be invested, the lack of suitable products on home soil, the hunt for competitive pricing and the need to diversify their portfolio will increasingly lead them to look beyond France.”