Paris most sought-after city in Europe for real estate

Paris has topped yet another survey for real estate investment attractiveness. Over one thousand investors were asked which city’s real estate they would most want to buy into in 2018, and the capital came out ahead of other major European markets including London. 

The Investors Intentions Survey was carried out by real estate research firm CBRE, and found that Paris has leapfrogged the competition after coming fifth for five consecutive years prior to its latest report. Just over 1,000 fund managers, investment bankers and individual investors were asked a range of questions including which city they saw as having the most attractive real estate market.

And Paris beat out competition from London, Frankfurt, Amsterdam and Madrid who occupied the next four spots. What drove this result? One of the report’s authors explains:

“The election of Emmanuel Macron, the Grand Paris transportation and renovation project, as well as the 2024 Olympics have catapulted Paris to the top of the world stage. France and its capital are benefiting from a very favourable environment for investors, who are increasingly looking to its market,” said Fabrice Allouche, president of CBRE France.

The industry has been singing the praises of the president lately. “Foreigners are looking [at the Parisian market] with a new eye,” said Charles-Marie Jottras, president of luxury agency Feau, adding that “…it’s a new phenomenon, with French buyers no longer leaving and many returning.” Barnes president Thibault de Saint Vincent added that “Without Macron, prices would not have grown as fast.”

Properties in Paris appreciated 7.5% in 2017. Frankfurt’s price growth was double this but is a much smaller market, while in London prices fell. Brexit was undoubtedly the main factor as the previous decade had seen huge growth, but interestingly the CBRE did not mention this in their initial report release.

One other interesting finding of the survey is that for the first time industrial real estate is now more sought after by the professional investment community than either residential or office properties. Compressing yields in the latter two are probably in large part behind this trend.

Photo by Anthony DELANOIX on Unsplash