Market at a glance
The investment market appears to be less affected by the health and economic crisis than the rental market. After a second quarter in which investment volumes had fallen 64% year-on-year due to the eight weeks of lockdown, the third quarter saw a moderate upturn in activity, with €3.9 billion, down 40% compared with the third quarter of 2019.
Since the beginning of 2020, €11.7 billion have been invested in commercial property in the Paris Region, down 31% compared with the same period last year Nationally, the amount of investment has reached €16.5 billion, down 33%.
In terms of asset type, offices remain largely predominant in Paris Region investments, which explains in particular the high weight of Paris, which accounts for 42% of the volumes committed since the beginning of the year.
Investors are predominantly French and the proportion of foreign investors has been contracting sharply over the last 9 months. The travel restrictions linked to the health measures and the uncertainty weighing on the economic recovery, amplified in this autumn by the second wave of the epidemic, are pushing international investors to a certain wait and see attitude.
There has also been a refocusing of the players' strategies, which had tended to diversify their risk profile in recent years, towards core assets, with particular attention paid to the quality of the tenant and his ability to pay rents. Nevertheless, value added and opportunistic funds are still present, provided that the risk is remunerated at fair value, in a context of tighter and more selective access to credit.
Yields on prime assets remain stable and remain at low levels, due to the increased attractiveness to investors and the resilient rental values for this type of property. Riskier assets are seeing their rates of return rise. Interest rate differentials between the different types of assets, which had tended to narrow in recent years, are expected to widen again in the coming months
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