Country Report France Q3-2018
„Investors increasingly want sustainable, green investments.“

Dear readers,

Ten years have passed since the financial crisis, which peaked with the collapse of the US bank Lehman Brothers. Since then, our industry has professionalised noticeably. Every investment decision is critically evaluated – by both banks and investors. That is also the case in the French real estate market, which has developed extremely positively overall during the last ten years. In the first half of 2018 alone, the transaction volume totalled EUR 12.5 billion – a year-on-year increase of 27 %. It is noteworthy that a total of approximately EUR 3 billion was invested in new buildings. The growing importance of “green properties” on the French real estate market is a significant driver of that development. Investors increasingly want sustainable, green investments – a trend that will become even more important in the future!

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 at a high level

After the French Real Estate Economy Index fell in line with the general upturn in the second quarter, there was a slight decrease of 0.6 % in the third quarter, which was also in line with the Euro Score. At 236.2 points, the overall development of the French Real Estate Economy Index remains stable at a high level.

CAC 40 grows, real estate market Indicators decline

However, the overall steady trend is partially the result of contradictory developments in the contributing Indicators. While the French leading share index CAC 40 achieved significant positive development, with a rise of 7.3 % compared to the previous quarter, returning to the high seen in April, the real estate share index FTSE EPRA/NAREIT displayed a downward trend: Following a slight growth in June, there was a decline in August and particularly in September, resulting in a fall of 2 % compared to the previous quarter to 3,865 points. The development of the Economic Sentiment Indicator (ESI) also shows a downward trend. The sentiment indicator of real estate experts fell by 3 % compared to the previous quarter to its current level of 106.3 points.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2018

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1807/1808/18Q3-18Delta (%)
Q2-18 / Q3-18
DE
eq
up
eq
eq
eq
310.7
314.9
316.3
312.8
0.7
GB
do
do
up
upup
up
219.0
218.8
218.8
216.5
-1.1
PL
up
do
do
eq
eq
189.1
190.8
189.8
188.3
-0.4
NL
up
do
eq
eq
eq
200.4
201.5
200.5
199.3
-0.5
FR
up
do
do
eq
eq
237.7
238.9
237.9
236.2
-0.6
ES
dodo
do
dodo
eq
eq
204.1
200.7
198.8
196.4
-3.8