Housing and urban logistics on AEW’s radar in resilient France

Despite ongoing uncertainty owing to Covid lockdowns in France, the country’s economy has proven relatively resilient according to Ken Baccam, Director, Research and Strategy, AEW.

Paris, and the Paris Region, is still one of Europe’s global cities, and this has been reinforced by Brexit, he told Real Asset Insight’s Richard Betts.

Meanwhile, AEW remains focused on core markets which have stayed relatively resilient, including offices and retail to some extent. “But if I had to choose two particular sectors that would probably grow even more strongly, supported by fundamental trends, I would mention residential and light industrial/urban logistics,” Baccam said.

Residential investment is no longer a niche sector in Europe, he pointed out. The sector represents almost 25% of the overall investment market. The French market has growth opportunities in the residential sector too. Whereas in Netherlands and Germany, residential’s share of investment volume is 30% to 40 %, “in France we reached 10% to 15%,” Baccam said.

And the preference is not only for traditional residential space. Demand for senior housing has consistently outpaced supply in the main markets and building permit statistics show that the supply could become tighter still.

Meanwhile, after 20 years’ of investing in logistics, AEW is still keen on the sector and is watching the smaller scale light industrial and urban logistics market closely.

Click on the video above to watch the full interview or listen to the podcast below.