Country Report France Q2-2021
“Demand for serviced offices, which offer significantly more flexible rents, has increased dramatically.”

Dear readers,

“The coronavirus pandemic has caused a considerable slow-down in processes in the real estate sector. All in all, the letting market declined by 8 % in terms of the ten-year average in the first six months of 2021. Investment volume was also down by a significant margin of 30 %. The vacancy rate rose slightly to 7.5 %. Trends that were beginning to emerge before the pandemic have accelerated, which has affected the office market, among others. Demand for serviced offices, which offer significantly more flexible rents, has increased dramatically. The logistics sector continues to boom, but we are seeing shifts here too: demand is centred on modular buildings that have a high level of versatility and can meet the requirements of the respective user. Demand for residential portfolios among institutional investors remains high, although supply is extremely scarce. The rising vaccination rate may have raised hopes of a return to a certain new normality, but we are not out of the woods yet and must keep a close eye on how the market develops.” 


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 returns to pre-crisis levels

The French REECOX performed positively in the second quarter of 2021 following its solid start to the year. The REECOX value rose to 245.0 points quarter on quarter, an increase of 7.4 %, meaning that the REECOX has now returned to and surpassed its pre-crisis level.

Real estate shares remain strong

Performance on the stock markets is a major factor in the positive overall development. The French benchmark index, the CAC 40, recorded a rise of 7.3 % compared to the first quarter of 2021. The index finished June at 6,507.8 points. The FTSE EPRA/NAREIT France real estate share index also began the second quarter well with growth of 5.3 % in April and 6.6 % in May. It closed the second quarter up 7.5 % at 3118.6 points, despite a decline of 4.2 % in June. Business sentiment as measured by the Economic Sentiment Indicator (ESI) also developed extremely positively, recording double-digit growth of 16.6 % to 112.2 points.

Synopsis of Input Variables and Real Estate Economic Situations Q2-2021

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q1-2104/2105/21Q2-21Delta (%)
Q1-21 / Q2-21
DE
up
up
upup
eq
eq
328.9
339.4
348.4
356.4
8.4
GB
up
up
upup
eq
eq
203.0
217.0
219.5
219.9
8.3
PL
upup
upup
upup
eq
up
181.7
191.4
197.6
197.8
8.9
NL
up
up
upup
eq
eq
188.2
197.4
201.7
204.3
8.6
FR
up
up
upup
eq
up
229.0
237.3
244.8
245.0
7.0
ES
up
up
upup
eq
up
175.1
181.2
184.1
183.4
4.7