Country Report France Q3-2021
“Renovations, green buildings and flex offices are the current megatrends.“

Dear readers,

“Following a significant economic downturn due to the coronavirus pandemic, many areas are now booming once again. Growth is exceeding forecasts, and unemployment is at a level seen before the Lehman crisis. Thanks to support measures, many businesses are doing better than ever. However, the usually resilient real estate market is facing challenges in certain areas, as is evident in developments on the office real estate market: the proportion of people working from home has increased sharply due to the pandemic, and employees appreciate the advantages of not commuting. Now the task for employers is to make offices attractive so that staff will want to come and work in them. These changes are also reflected in the level of demand, with new office tenants needing 20 % less space overall. This trend will also have implications for the construction industry. Renovations, green buildings and flex offices are the current megatrends. By contrast, the residential and logistics markets remain extremely attractive, again yielding top returns. Investments in 2021 are expected to total EUR 15 to 16 billion.”


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

French Real Estate Economy Index down slightly

After being part of the general upturn in the first half of the year, the French Real Estate Economy Index fell by 0.8 % in the third quarter to 243.4 points – the biggest drop compared with the other countries monitored. Following a positive performance in July (+2.1 %), losses of 1.1 % and     1.7 % were recorded in August and September respectively. 

FTSE EPRA/NAREIT France real estate share index is the dominant factor

The overall downturn in the REECOX France is primarily due to the development of the FTSE EPRA/NAREIT France real estate share index and the business climate. The FTSE EPRA/NAREIT France experienced a considerable slump in the third quarter, declining by 6.8 % compared with Q2, and had slid below the 3,000 mark as of the end of Q3 (2,905.7 points). After double-digit growth in the previous quarter, the business climate fell by   1.4 % to 111.1 points as a result of share price losses in August (-3.4 %) and September (-1.2 %). By contrast, France’s blue-chip index, the CAC 40, proved largely stable at 6,520.0 points at the end of the third quarter, following a slight increase of 0.2 % compared with Q2.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2021

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-2107/2108/21Q3-21Delta (%)
Q2-21 / Q3-21
DE
do
do
eq
eq
eq
356.4
360.1
361.7
354.5
-0.5
GB
eq
up
up
eq
eq
219.9
222.8
222.9
222.9
1.4
PL
up
up
do
eq
up
197.8
198.1
198.7
198.5
0.4
NL
up
do
do
eq
do
204.3
205.5
204.6
203.3
-0.5
FR
eq
do
eq
eq
do
245.0
250.5
247.7
243.4
-0.7
ES
eq
eq
up
eq
do
183.4
184.9
184.7
186.0
1.4