Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
THE INVESTMENT
MARKET PARIS REGION
1ST QUARTER 2017
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Investment volumes
€2.4 billion for the 1ST quarter 2017 Source : Knight Frank
+ 2%: after a spectacular end to 2016,
the market gets its breath back. The
volume invested in the Paris region in
the 1st quarter topped €2.4 billion, a
slight increase on early 2016.
Office assets still dominate by far while
retail space is attractive and is
represented more strongly than usual
(with the exception of 2016)
Domestic investors still control most of
the volumes invested (64% in the 1st
quarter), with, however, an increase in
other investors from the Eurozone.
More than half of the volumes invested
involve transactions of between 100
and €200 million, a reflection of the
reduction in their unit size.
Early 2017 has nonetheless witnessed
the bringing to market of a good
number of sizeable transactions, due to
be completed over the next two
quarters, which bodes well for strong
investment volumes over the coming
year.
900
1 4
51
2 1
54
4 2
41
1 3
61
2 1
44
2 7
40
5 6
33
1 4
43 3
509
2 4
04
4 7
66
1 7
58
2 6
51
3 6
85
3 6
24
3 1
18
5 4
89
2 6
66
5 4
44
4 7
11
4 0
44
3 9
72
6 3
22
2 3
92
4 9
20
5 3
09 6 9
23
2 4
38
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
11 000
12 000
13 000
14 000
15 000
16 000
17 000
18 000
19 000
20 000
21 000
22 000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2010 2011 2012 2013 2014 2015 2016 2017
In m
illi
on
s €
Source : Knight Frank Quarterly Volume Annual Volume
2013 :
€11,7 billion
2014 :
€16,7 billion
2015 :
€19,0 billion
2016 :
€19,5 billion
2010 :
€8,7 billion
2011 :
€11,9 billion
2012 :
€12,1 billion
Location of Investment activity
Strong activity in the CBD and La Defense Source : Knight Frank
Paris CBD Rest of Paris
inner city
La
Defense
Western
Crescent Inner Rim Other
Total
Paris Region
838 278 426 563 217 116 2 438
Share as a % of volumes
invested in Paris Region in
2017
Change as a % of volumes
invested in 2017 compared
with 2016
La
Defense
17%
Western
Crescent
23%
Paris
CBD
34%
Rest of
Paris
inner city
11%
Inner
Rim
9%
-33%
+168%
0%
-10%
+223%
Volume invested in the 1ST quarter 2017 (in billion €) in Paris Region
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Focus on the CBD
Sustained momentum in the CBD Source : Knight Frank
573
448
303
514
247 632
707
878
160
2 1
11
702
982
625
899
268
943
353
1 4
39
893 1 3
37
792
729
605
1 6
21
313
1915
1213
2122
838
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1
2010 2011 2012 2013 2014 2015 2016 2017
In m
illi
on
s €
Quarterly volume Annual volume
2010 €1.84 billion
2011 €2.46 billion
2013 €2.74 billion
2012 €3.96 billion
21% 21%
33%
37%
23% 24%
2014 €4.02 billion
22%
33%
2016 €5.56 billion
2015 €3.74 billion
There are excellent prospects for the
CBD in 2017 insofar as the volume
invested over the first 3 months is
significantly higher than at the beginning
of 2016 (+ 168%).
The CBD has therefore retained a much
higher than normal share of the regional
activity (34%) which shows its continued
attraction to investors.
The CBD's success nonetheless is
subject to one imponderable – the
availability of assets for sale and the
completion of one or several major deals.
It is unlikely that 2016's performance will
easily be equalled, given that it was
boosted by the completion of an
unusually large transaction (€1 billion).
There are likely to be large numbers of
disposals over the next few months which
allows us to remain optimistic.
Investors are particularly keen on CBD
properties with a strong commercial
element at street level.
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Date Building Asset type Geographical
area
Surface
area
Price
(in € million) Buyer Seller
Jan.
2017
Grand Central
Saint-Lazare
Offices CBD 23,000 335 Union Investment The Carlyle
Group
Jan.
2017
112-122 avenue
Emile Zola
Offices Paris 14/15 20,000 165 Société Foncière
Lyonnaise
SMABTP
March
2017
102 avenue des
Champs Elysées
Retail CBD 687 115 AEW Europe Thor Equities
Feb.
2017
Nework Offices Western
Crescent
21,000 100 Générale
Continentale
Investissements
Eiffage
Immobilier &
Altarea Cogedim
Feb.
2017
Eria Tower Offices La Defense 26,000 70 Altafund The Carlyle
Group
Jan.
2017
6 rue de la Paix Retail CBD 740 65 Redevco Savills AM
Feb.
2017
Horizon Défense Offices Western
Crescent
16,000 60 UBS Real Estate DeAWM
Examples of transactions Source : Knight Frank
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Breakdown by asset type
Dominance of offices & a continued appetite for retail Source : Knight Frank
86%
12% 2%
2017
Office Retail Other assets
83%
14%
3%
2016
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Breakdown by risk profile
The Core takes the majority share but Value Added is picking up Source : Knight Frank
53%
5%
28%
53%
14%
33%
2017
Core which in pre-rented developments projects
Core Plus Value Added / blanc
which in developments projects forward sale
58%
9%
12% 3%
67%
18%
15%
2016
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Breakdown by amounts
The market refocuses on intermediate deals (from €100-€200 million) Source : Knight Frank
10%
21%
55%
14%
2017
< €50 million €50 to €100 million
€100 to €200 million > €200 million
14%
17%
29%
40%
2016
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Source : Knight Frank
64%
18%
9%
10%
1%
France Eurozone Europe outside Eurozone North America Asia / Middle East Other
68%
5%
10%
7%
7% 3%
2016 2017
Breakdown by purchaser nationalities
French investors Keep the upper hand Source : Knight Frank
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Prime yield
Historic lows on rates for Prime assets Source : Knight Frank
3,13%
4,38%
1,00%
2,00%
3,00%
4,00%
5,00%
6,00%
7,00%
8,00%
9,00%
10,00%
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Source : Knight Frank Paris CBD La Defense
With a price bracket of between 3 and 3.25%,
largely at the same level since mid-2016,
Prime rates are at historic lows in the CBD.
This extremely low level has in no way
prevented the CBD from attracting investor
interest.
There may occasionally be continued
compression of Prime rates in other markets
in the Paris region after this has ceased to be
the case in the CBD: this happened in La
Défense early in 2017, with a Prime rate
currently of between 4.25 and 4.50%.
There are still wide differences in rates
between Core, Core Plus and Value Added
assets within each particular geographical
sector, often of between 200 and 350 basis
points
A key element to the success of the real-
estate portfolio among investors is the fact
that the spread between Prime rates and bond
yields continues to contract despite
maintaining a significant advantage in the
case of property assets (208 basis points
compared with 238 in late 2016).
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Prime yield
Stability of differentials Source : Knight Frank
3,00
3,75 3,75 3,75 3,75
4,75
4,25
4,50
3,50
4,25
4,00
4,25
5,00
4,50
3,25
4,00 4,00 4,00 4,00
5,00
4,50
5,00
4,00
4,50 4,50 4,50
5,25
4,75
2,50
3,00
3,50
4,00
4,50
5,00
5,50
Paris C
BD
Paris 3
/4/1
0/1
1
Paris 5
/6/7
Paris 1
2/1
3
Paris 1
4/1
5
Paris 1
8/1
9/2
0
La
Défe
nse
No
rth
ern
Ben
d
Ne
uill
y / L
evallo
is
Péri D
éfe
nse
South
ern
Ben
d
No
rth
ern
Inne
r R
im
Easte
rn I
nne
r R
im
South
ern
Inne
r R
im
As a
%
THE INVESTMENT MARKET – 1ST QUARTER 2017
PARIS REGION
Investment volumes and spread between bond and yields Source : Knight Frank
-8,00%
-6,00%
-4,00%
-2,00%
0,00%
2,00%
4,00%
0
5
10
15
20
25
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
Spread between rate of yields/bonds Volumes invested in the Paris Region
Bond advantage
Real-estate advantage
THE INVESTMENT MARKET – 1ST QUARTER 2017
ÎLE DE FRANCE
KEY FIGURES
KNIGHT FRANK FRANCE
Knight Frank is an international real
estate advisor.
In France, the company operates in the
corporate real estate market, mainly
comprising offices, retail premises and
industrial or logistics buildings.
Knight Frank France serves two
separate groups of clients: owner
investors and tenant companies.
Knight Frank France was founded over
40 years ago and is organised into six
business lines:
Offices, Retail, Capital Markets,
Property Management, Knight Frank
Valuation and L'Atelier Knight Frank
(a spatial design consultancy).
The Knight Frank France team includes
80 professionals working from Paris.
Historically specialising in the real estate
market in the centre of the capital, the
company has gradually widened its field
of expertise and is now a recognised
consultant in areas including La Défense
and the Western Suburbs of Paris. The
Capital Markets department, along with
the independent subsidiary Knight Frank
Valuation, also support their clients
throughout France.
Knight Frank France is the French
branch of Knight Frank LLP, a British
company founded more than 120 years
and now operating in 60 countries. It
offers its clients the skills of its 15,000
professionals, working from 413 offices
worldwide.
A global platform and an independent
partnership, specialising in tertiary and
residential real estate and employing
professionals dedicated to their clients,
Knight Frank enjoys a unique position in
the world of real estate consultancy.
Drawing on the constant support of its
clients and its recognised integrity,
Knight Frank is increasingly establishing
itself as the consultant of choice.
Philippe PERELLO
CEO
+33 1 43 16 88 86
Vincent BOLLAERT
Head of Capital Markets
+33 1 43 16 88 90
Antoine GRIGNON
Head of Retail Services - Capital Markets and Leasing
+33 1 43 16 88 70
Antoine SALMON
Head of Retail Leasing
+33 1 43 16 88 64
Aron SHADBOLT
Head of Knight Frank Valuation
+33 1 43 16 88 96
Guylene BROSSART
Head of Property Management
+33 1 43 16 88 91
Marc Henri BLADIER
Head of Office Agency and L’Atelier Knight Frank
+33 1 43 16 88 92