France Real Estate Report Q3 2012
Business Monitor International, July 2012, Pages: 58
The France Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on France's Real Estate industry.
The France Real Estate report examines the Commercial Office, Retail, Industrial and Construction segments throughout the country in the context of the hexagon’s new political direction.
Covering the entire country, with a data focus on the principal cities of Paris, Nice and Marseille, the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the eurozone crisis on a market already characterised by relative stagnation.
In general, prevailing economic sentiment in France remains subdued as consumers cut spending in the face of slow growth, high unemployment and austerity measures. A US$25bn package of tax increases and spending cuts for 2012 and 2013 failed to defend France’s AAA credit rating, which was downgraded in January 2012 by Standard & Poor’s. As a result, despite certain bright spots such as high-end retail, we maintain a bearish outlook for France’s commercial real estate sector.
Key Points
- Speculation that Hollande's victory will mark the beginning of a widespread rejection and reversal of austerity measures across the eurozone is exaggerated in our opinion. While we expect to see greater dialogue and debate over the role of growth-supportive measures, we believe that fiscal targets are likely to be respected for the time being.
- Preparation for France's hosting of the UEFA Euro 2016 Football Championship will create new contracts and jobs in the construction sector, albeit not at a level comparable to that seen in Poland and Ukraine, where the 2012 games are being held. Overall, the sector should continue to report growth over our forecast period until 2021.
- Private investment in construction is likely to increase, as austerity measures reach the infrastructure segment, and French firms are likely to look to their overseas clients in order to secure new contracts. Nonetheless, business ties between France and other countries, particularly Russia, should benefit French firms looking to boost their presence overseas.
- We believe that with the French Socialist Party securing a parliamentary majority in elections on June 17, giving President Francois Hollande control of the French legislature, attention will now focus on the prospect of Germany backing a proposed EUR120bn 'growth pact' for Europe.
Executive Summary 5
SWOT Analysis 6
France Real Estate And Construction SWOT 6
France Political SWOT 7
France Economic SWOT 7
France Business Environment SWOT 8
Real Estate Market Overview 9
Market Analysis – Office 12
Rents And Yields 12
Table: Historic Rents, 2010-2011 (EUR per m2/month) 12
Table: Net Yield, 2011-2012 (%) 12
Table: Terms Of Rental Contracts/Leases, Mid-2011 12
Supply And Demand 13
Industry Forecast Scenario 14
Table: Rents, 2012 (EUR per m2/month) 14
Table: Net Yield, 2008-2016 (%) 14
Market Analysis – Retail 15
Rents And Yields 15
Table: Historic Rents, 2010-2011 (EUR per m2/month) 15
Table: Net Yield, 2011-2012 (%) 15
Table: Terms Of Rental Contracts/Leases, Mid-2011 16
Supply And Demand 16
Industry Forecast Scenario 17
Table: Rents, 2012 (EUR per m2/month) 17
Table: Net Yield, 2008-2016 (%) 17
Market Analysis – Industrial 18
Rents And Yields 18
Table: Historic Rents, 2010-2011 (EUR per m2/month) 18
Table: Net Yield, 2011-2012 (%) 18
Table: Terms Of Rental Contracts/Leases, Mid-2011 19
Supply And Demand 19
Industry Forecast Scenario 20
Table: Rents, 2012 (EUR per m2/month) 20
Table: Net Yield, 2008-2016 (%) 20
Forecast Scenarios 21
Infrastructure Report 21
Table: France Construction And Infrastructure Industry Data, 2008 - 2016 21
Table: France Construction And Infrastructure Long Term Forecasts, 2013 - 2021 22
Construction and Infrastructure Forecast Scenario 24
Macroeconomic Outlook 26
Table: France - Economic Activity 28
Real Estate Risk/Reward Ratings 29
Real Estate/Construction Risk/Reward Ratings 29
Table: Real Estate/Construction Risk/Reward Ratings 29
France’s Business Environment 29
Table: BMI Business And Operation Risk Ratings 30
Table: BMI Legal Framework Rating 31
Table: Labour Force Quality 33
Market Outlook 33
Table: Trade And Investment Ratings 34
Table: Top Export Destinations 36
Competitive Landscape 37
Company Profiles 41
Bouygues Construction 41
Eiffage 42
Gecina SA 43
Klépierre 44
Lafarge 45
Unibail-Rodamco 46
VINCI 47
Demographic Data 48
Table: France's Population By Age Group, 1990-2020 ('000) 49
Table: France's Population By Age Group, 1990-2020 (% of total) 50
Table: France's Key Population Ratios, 1990-2020 51
Table: France's Rural And Urban Population, 1990-2020 51
BMI Methodology 52
How We Generate Our Industry Forecasts 52
Construction Industry 53
Bank Lending 54
Real Estate/Construction Business Environment Rating 54
Table: Weighting Of Indicators 55
Sources 57
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