Country Report France Q3-2019
“The French economy bends in the face of political unrest and protectionist efforts, but does not break.”

Dear readers,

In France, we have a fable about a proud tree and a little reed. The tree is arrogant towards the reed whenever a light wind blows, but the tables are quickly turned when a powerful storm hits: the tree falls while the reed bends in the gale. The current French economy is rather like the reed – it bends in the face of political unrest and protectionist efforts, but does not break. And the real estate market too remains unfazed by uncertainty. We anticipate a record volume of € 35 million on the investment market this year. So is the long-awaited winter still some time away? That remains to be seen. The letting market is not as bullish as it once was. Though still at a very high level, letting has declined in both the logistics and office markets by 14 % and 11 % respectively. This is a development that should definitely be borne in mind.

 

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 on the rise

The French REECOX is indicating positive development for the third consecutive quarter. Each of the past three months saw a rise, with a modest change in July (+0.1 %) growing into a stronger trend in August (+0.3 %) and September (+0.8 %). All told, the REECOX France rose by 1.5 % in the third quarter to its current level of 234.7 points – a level last seen in August 2018.

Positive momentum on the stock market, business sentiment stable

The rise has been carried primarily by the stock markets. France’s benchmark stock market index, the CAC 40, is once again indicating price gains. Following a rise of 2.5 %, it is now at 5,677 points – the last time it was higher was in October 2007. The FTSE EPRA/NAREIT France real estate share index saw significant growth, increasing by 6.4 % in the third quarter to 3,898 points. September (+4.0 %) was marked by a particularly strong rise, while the index rose moderately in August (+2.9 %) after a slight decline in July (-0.5 %). Business sentiment as measured by the Economic Sentiment Indicator (ESI) was effectively stable, falling by 0.2 % to 103.9 points, with little volatility.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1907/1908/19Q3-19Delta (%)
Q2-19 / Q3-19
DE
eq
up
do
eq
do
296.6
296.2
295.4
295.6
-0.3
GB
eq
up
dodo
eq
do
198.9
198.6
192.7
189.5
-4.7
PL
do
up
eq
eq
dodo
186.8
186.5
184.9
185.0
-1.0
NL
up
up
up
eq
dodo
188.4
189.8
189.0
192.0
1.9
FR
up
up
eq
eq
dodo
231.8
232.1
232.8
234.7
1.3
ES
eq
up
eq
eq
dodo
198.0
198.6
199.8
199.0
0.5