Country Report France Q1-2019
“The market continues to boom, and there is no end in sight for the cycle.”

Dear readers,

Emmanuel Macron’s € 10 billion package of measures has surely contributed to predictions of economic growth above the European average in France this year. The fact that France has significantly lower exports than Germany, and is therefore less dependent on the global economy, is an even more significant factor. That is currently benefiting our economy. And the real estate market is also in good shape. In fact, it's in such good shape that demand is now outpacing supply – particularly in the office segment. Vacancy rates of 2.3% in Paris and 5.4% in the region demonstrate that very clearly. While construction continues apace, demand is simply too high. Interest from foreign investors also remains high. The market continues to boom, and there is no end in sight for the cycle.


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 recovers at the start of the year

Following significant negative development at the end of 2018, which brought the French REECOX into line with the rest of Europe, there was a turnaround in the first quarter of 2019, with positive development over all three months compared to the preceding months. That resulted in a total rise of 3.2%, to 228.3 points.

Stock markets achieve double-digit growth

The rate of change differed among the input variables. The French leading share index CAC 40 recorded significant growth: from a closing level of under 5,000 points in January, it climbed relatively consistently to approximately 5,350 points at the end of the quarter. That represents an increase of 13.1% compared to the previous quarter.

The real estate leading share index FTSE EPRA/NAREIT France also played a significant role in the overall development of the REECOX. Following a clear jump in January, it rose slightly in the following months to its current level of 3,733 points. That resulted in a total increase of 14.3%.

However, that general positive trend is not reflected by expert assessments as measured by the Economic Sentiment Indicator (ESI). Its level of 101 points in March 2019 represented a slight rise of 0.5%, and left it below the level seen in October 2016.

Synopsis of Input Variables and Real Estate Economic Situations Q1-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-1801/1902/19Q1-19Delta (%)
Q4-18 / Q1-19
DE
upup
up
do
eq
do
298.2
303.4
300.8
303.4
1.7
GB
up
upup
dodo
eq
do
204.9
205.5
200.7
205.1
0.1
PL
up
upup
do
eq
do
187.5
185.9
186.5
187.6
0.1
NL
upup
up
do
eq
do
191.3
190.4
190.7
191.4
0.1
FR
upup
upup
do
eq
do
223.7
225.4
225.9
228.3
2.1
ES
up
upup
up
eq
dodo
191.8
196.4
196.5
199.3
3.9