You’ve taken over the French business at a really exciting time with the Olympics just around the corner. What impact will they have on the French real estate market?

The eyes of the world will be on Paris this summer when the French capital hosts the 2024 Olympics. Infrastructure development goes hand in hand with global sporting events, and the Government is planning to announce the opening of a six-station extension to metro line 11 later this year. Four completely new lines, alongside an extension to line 14, are also in the pipeline. Collectively dubbed the Grand Paris Express, these new routes, which will enable people to travel around greater Paris without entering the city centre, should be completed by 2030.

What makes Paris so attractive to real estate investors?

Paris is one of the largest real estate markets in Europe and has climbed four places in Savills most recent global resilient cities index where it now ranks 7th. Prime office rents have risen 4.7%, while vacancy rates in the central business district are just 1.9%. The appeal of Paris has never been so high – and the difference in rents between central Paris and the rest of the city has never been so great.

After the Olympics, many venues in the outskirts of Paris will be repurposed into residential properties – thus helping, albeit very modestly, to ease the undersupply of homes. For now, we expect to see a good boost for Parisian hotels and hospitality later this year.

What will happen to the French real estate investment market this year?

In France more widely, we anticipate seeing a gradual resurgence in investment activity this year on the back of recent downward price adjustments which have created opportunities for cash-rich investors. Our projection for full year investment volumes in France by the end of 2024 is approximately €20 billion, reflecting a rebound of 30% year-on-year. We expect investment activity will be driven by opportunistic investors enticed by the prospect of favourable pricing adjustments. 

Many investors will maintain their focus on the premium green segment of the market. Due to the decline in capital values, real estate returns will be predominantly driven by income returns rather than capital appreciation. Consequently, attention will be directed toward robust occupier markets, where there is potential for high rental growth and a strong emphasis on environmental, social, and governance (ESG) credentials.