Country Report France Q1-2021
“Interest in residential properties among institutional investors is extremely high.”

Dear readers,

“The increase in people working from home caused by the coronavirus pandemic is also having an impact on residential properties. Prices have fallen for the first time in Paris city centre, while the market in the Paris suburbs is booming. Interest in residential properties among institutional investors is also extremely high: Last year, € 5.5 billion was invested in this asset class, which equates to an increase of 41 % compared to 2019. Overall investment of € 30 billion is expected this year, € 1 billion more than in 2020. Restaurants in France are currently facing major difficulties, as the many seasonal workers they customarily employ having sought alternative employment due to the pandemic. There is currently a shortage of around 100,000 workers in this sector. The hotel industry – and particularly business hotels – is also suffering. Another factor is the significant overheating of stock markets in the US, which poses potential risks. We hope that the rate of vaccination continues to rise and that we can enjoy a more relaxed summer.”


Your Anne-Isabelle Carbonnières

Contact

Ms Anne-Isabelle Carbonnières
Managing Director France

Phone: +33 1 550 484 85
E-mail: Anne-Isabelle.Carbonnieres@Deutsche-Hypo.de

REECOX France remains robust

REECOX France was able to continue the recovery course it began midway through last year in the first quarter of 2021. The index slipped slightly in January, but went on to record growth in both of the next two months. The index reported quarter-on-quarter growth of 4.2 %, closing the first quarter of 2021 at 229.0 points.

Benchmark index CAC 40 back over the 6,000-point mark

The positive overall development of REECOX France was primarily due to the development of France’s benchmark CAC 40 index and the business climate.

The CAC 40 continued to develop dynamically, rising by 9.3 % to 6,067 points and reaching its highest level since February 2000. Meanwhile, the FTSE EPRA/NAREIT France real estate share index suffered a slight setback at the beginning of the year. In contrast to the double-digit growth in the previous quarter, it closed the first quarter of 2021 with a marginal decline of 0.8 %. This figure is due to the 4.0 % slump in January. Economic expectations, as reflected by the Economic Sentiment Indicator (ESI), are also a little more positive again: The business climate stood at 89.2 points at the end of the year, but the situation has improved markedly since then. At the end of the first quarter it reached a level of 96.8 points, an increase of 8.5 % compared to the previous quarter. 

Synopsis of Input Variables and Real Estate Economic Situations Q1-2021

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-2001/2102/21Q1-21Delta (%)
Q4-20 / Q1-21
DE
upup
do
upup
eq
up
311.0
303.1
309.4
328.9
5.8
GB
up
up
upup
eq
upup
185.3
184.0
188.8
203.0
9.6
PL
do
up
upup
eq
upup
172.7
174.9
178.4
181.7
5.2
NL
upup
up
upup
eq
up
178.5
181.4
181.2
188.2
5.4
FR
upup
eq
upup
eq
upup
219.8
219.0
223.0
229.0
4.2
ES
up
up
upup
eq
upup
169.6
171.4
170.6
175.1
3.2