Country Report France Q1-2022
“The letting market continued to recover in the first three months.”

Dear readers,

“Inflation has risen constantly over the past few months. In France, it currently stands at 4.5 % – lower than the eurozone average of 7.5 %. The comparatively low inflation rate is attributable to the extensive support measures taken by the state, particularly the caps on electricity and gas prices, which are benefiting private households and businesses alike. The private sector is currently seeing the highest growth since October 2018, with many stocking up on commodities and materials as a precaution. That stockpiling is also being driven by uncertainty on account of the war in Ukraine, the further course and impact of which are anyone’s guess. The high inflation rate underscores the popularity of the real estate asset class. Thanks to the continued recovery in the letting market in the first three months, the year is expected to see letting of at least 2 million m2, bringing 2022 back into line with the 10-year average. Even though the outcome of the upcoming parliamentary elections remains to be seen, the results of the French presidential election have contributed to greater clarity.”


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 index posts 4.4 % drop

The French real estate index saw the second-largest decline of any European country over the course of the first quarter (-4.4 % quarter on quarter). On the heels of moderate declines of 0.9 % in January and 0.8 % in February, the index recorded a significant drop of 2.7 % in March to stand at 240.0 points.

Blue-chip index CAC 40 down sharply after record high

The performance of the input variables behind the French REECOX was a mixed bag at the start of the year. The French blue-chip index CAC 40 fell by a substantial 6.9 % from its record high in the previous quarter to finish March at 6,659.9 points. The business climate, as measured by the Economic Sentiment Indicator (ESI), posted a similarly marked decline of 7.0 %, bringing it down to 105.7 points. By contrast, the FTSE EPRA/NAREIT France real estate share index recorded moderate losses in February (-1.3 %) and March (-1.5 %) on the heels of a positive January (+3.3 %). Accordingly, the index was virtually stable quarter on quarter, rising 0.4 %.

Synopsis of Input Variables and Real Estate Economic Situations Q1-2022

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-2101/2202/22Q1-22Delta (%)
Q4-21 / Q1-22
DE
dodo
do
dodo
eq
upup
343.4
340.1
334.3
320.6
-6.6
GB
up
do
upup
upup
upup
218.5
220.7
218.6
218.2
-0.1
PL
do
do
dodo
upup
upup
197.6
194.9
190.2
189.5
-4.1
NL
dodo
do
do
eq
upup
202.3
198.1
194.5
194.6
-3.8
FR
do
eq
dodo
eq
upup
251.6
248.7
246.7
240.0
-4.6
ES
do
up
dodo
eq
upup
186.0
186.1
187.0
181.6
-2.4