Country Report France Q2-2019
“We are currently in an extraordinary cycle.”

Dear readers,

The French REECOX has developed positively for the second consecutive quarter. That is reflected by the real estate market: An investment volume of EUR 14 billion in the second half of the year helped it reach last year’s record level again. That was almost 50 % higher than the ten-year average. We are currently experiencing an extraordinary cycle. And even though it is clear that the cycle must end at some point, there are still no signs of that happening. Property is popular – not least because of a lack of alternative investments. All asset classes are thereby in demand, with one exception: retail. Here investment volume has fallen by a full 27%, compared to the previous year. Above all, the future of hypermarkets is uncertain. Consumer behaviour has changed and there is a lot of discussion about how to restructure these sealed spaces and put them to good use, taking into account sustainability. The greening of roofs and the re-purposing of large car parks are worthwhile initial steps.

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 continues its positive development

The French REECOX made considerable gains in the first quarter, and that trend has continued in the second quarter of the year. It is thereby notable that the REECOX in France developed in contrast to the otherwise negative trend. Overall the REECOX France rose by 1.2 %, to its current level of 231.8 points.

Stock markets calm somewhat

Following the extremely volatile development of French stock markets since the middle of last year – at times with double-digit quarterly rates of change – there seems to be a cooling of that dynamism. The French leading share index CAC 40 continued to develop positively. Following a rise of 3.5 %, it is now at 5,539 points – the last time this level was higher than that was in December 2007.

Meanwhile, the real estate share index FTSE EPRA/NAREIT France recently declined somewhat. Compared to the previous quarter, the index fell by 1.8 % to 3,665 points at the end of June.

Economic expectations, as reflected by the Economic Sentiment Indicator (ESI), were also a little more positive again: The business climate almost fell below the 100 point mark in April, but the situation has noticeably improved since then. At the end of the quarter it reached a level of 103.9 points, a rise of 1.9 % compared to the previous quarter.

Synopsis of Input Variables and Real Estate Economic Situations Q2-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q1-1904/1905/19Q2-19Delta (%)
Q1-19 / Q2-19
DE
up
do
dodo
eq
dodo
303.4
302.4
303.1
296.6
-2.2
GB
up
do
dodo
eq
dodo
205.1
203.7
196.2
198.9
-3.0
PL
eq
up
do
eq
dodo
187.6
185.5
183.7
186.8
-0.4
NL
up
do
do
eq
do
191.4
192.9
188.4
188.4
-1.6
FR
up
do
up
eq
dodo
228.3
230.4
230.4
231.8
1.5
ES
eq
up
do
eq
dodo
199.3
198.8
198.2
198.0
-0.7