A long-established tradition has been discarded as domestic investors, who have dominated the French market for decades, are now being nudged aside by a new wave of foreign investors, experts agreed at Real Asset Media’s France Investment Briefing, which was held in London recently.
Capital is pouring into French real estate from other European countries like the UK, Germany and Switzerland and from the US, the Middle East and Asia, but the most active players this year have been South Korean institutions.
‘Global players are showing a strong appetite for the French market and we expect a very busy Autumn, with more transactions coming in the Fall,’ said Hugues Moreau, Partner, Real Estate/Mergers & Acquisitions, Gide Lourette Nouel. ‘South Korean capital has been at the front of the queue, accounting for 4 of the 5 largest deals done this year’.
The pick-up in overseas investment has been noticeable, as has the decline in the share of domestic capital, but the most notable development this year has been South Korean institutions’ focus on France.
‘There has been a marked shift from the UK to France, or rather from London to Paris,’ said Tom Leahy, Director of Market Analysis EMEA, RCA. ‘Most South Korean investment has been in France, €4 bln’s worth of acquisitions so far this year’.
Paris has become more attractive because the economy is doing well and political risk is receding, but also because South Koreans can find the big ticket assets they are looking for, he said, with an average lot size of €200 mln.
The long list of buyers includes Samsung Life Insurance, Hanwha Investment & Securities, Mirae Asset, Samsung Securities, Hana Financial Group and Vestas Investment Management.
‘The biggest change in the last 12 to 18 months has been in sentiment,’ said Andrew Angeli, Head of European Strategy & Research, CBRE Global Investors. ‘France is not only one of the best performing economies in the G7, but it has positive prospects. In an uncertain world, investors find something very comforting about a stable economic outlook’.