Spotlight - Investment market in France Q1 2025

• Uncertainties are clouding the economic outlook: growth is expected to be only 0.6% or 0.7% in 2025 for France. The main factor is the continued decline in the ECB's key interest rates.

• The ECB's monetary policy easing is a factor in the recovery of the French investment market, which gained momentum in the first quarter of 2025. With a total of €4 billion, growth is up 55% year-on-year.

• However, this momentum remains to be confirmed, as it is currently largely based on renewed investor interest in commercial assets (+239%) through two exceptional corporate transactions (stakes in a Kering portfolio and the Forum des Halles).

• The revival of investment in office assets (+116%) also benefited from the magnifying effect of the sale of a stake in the Trinity tower. Otherwise, it remains concentrated in Paris' central business district and ‘Live-Work-Play’ locations in central Paris.

• The reopening of the French market to international investors is continuing. The share of international buyers rose to 58% of investment volumes in the first quarter of 2025 (compared with 47% a year earlier). This openness bodes well for market depth and activity.

• Yields are stabilising for prime assets (4.25% for offices in the CBD, 5.75% for retail parks in the Paris region and 4.75% for warehouses near Paris or Lyon). This trend is spreading to riskier assets in prime locations. Outside these few locations, however, the market still lacks transactions that would allow benchmark rates to be established.

• The French investment market is thus confirming its potential to approach the €20 billion mark by the end of 2025. Such a result would nevertheless remain modest from a historical perspective.

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