European Outlook : Paris Colliers International France June 13, - PowerPoint PPT Presentation

European Outlook : Paris Colliers International France June 13, 2018

Colliers International France KEY FIGURES € 65 Ms 2 nd 260 20 11,4 % employees years Tenant Rep. market share revenue in Paris, Lyon, of experience in Paris 2014-2017 for >5.000m² surfaces in 2017 Toulouse, Marseille, Bordeaux, Lille, Nancy, Reims & Aix- en-Provence 6 France Investment Briefing

Outlook Positive trends for France Economic Grands Brexit Strong Macronmania ! growth is Projets Property Shift of investment The election of Emmanuel back Fundamental allocations towards Macron restoring 2024 Olympic Games France. Investors are confidence outside of s and the Grand Paris +2,0% in 2017 actively confirming France thanks to structural Project : dynamics for +1,1% in 2016 their interest in changes. Letting market back strong development France on track with steady growth 7 France Investment Briefing

France & Paris Region France & Paris Region Macro economic Real estate The Grand Paris USPs USPs view market Express France & Paris Region Unique Selling Points 8 France Investment Briefing

France : Key facts 3 rd 2 nd 2 nd largest largest Infrastructure highest birth 1.656 country economy rate UHNWIs France has excellent infrastructure including in Europe in Europe after in Europe (Ultra High Net Worth Europe’s largest Germany and the Individuals) live in highspeed railway world’s 5th largest Paris, demonstrating system, major ocean economy its status as a major port facilities and an cosmopolitan extensive motorway destination. network 9 France Investment Briefing

Paris Region USPs 1 st highest GDP Technological Air hub largest portfolio hub in Europe 28 in value : 30.9% The Paris air hub is The Paris region has continental Europe’s Europe’s largest commercial of the French nation's GDP It brings together a high and 4.6% of the European leader: all major Real Estate portfolio (54 density of technology Union's GDP, ahead of European cities are within million sq m), while La companies, world-class Greater London and 2 hours by plane. Défense, boasting 3.6 competitiveness clusters Lombardy. million sq m of office space, and one of Europe's 3,600 businesses and highest concentrations in 180,000 employees, is the science and Europe’s top business technology sectors. district. 10 France Investment Briefing

Paris Region USPs 2 nd 2 nd 1 st Headquarters foreign investors foreign finance 29 of the world’s 500 the Paris region is more than 500 international Europe’s second most largest companies listed in businesses, banks, insurers and the Fortune Global 500 attractive city region to financial firms operate in the have their headquarters in foreign investors after French capital, where they the Paris region, ranking it London, and is ranked as employ nearly 126,000 people. one of the world’s top In all, € 90 billion are currently 3rd in the world, after Beijing and Tokyo, and 1st locations for strategic invested by foreign investors in in Europe. business activities. French financial assets. 11 France Investment Briefing

France & Paris Region Macro economic Real estate The Grand Paris Macro economic view USPs view market Express Macro economic view 12 France Investment Briefing

Reform in France : REALITY OR MYTH ? Reforms completed Reforms completed Reforms in progress or with impact on Real with impact on to come country’s attractiveness Estate • SNCF • Labor Code • Job training, apprenticeship, • Removal of the housing tax • Education unemployment insurance • Removal of the solidarity tax on • Social charges decrease in • Justice wealth (ISF) replaced by a real employee contributions and estate wealth tax (IFI) increase of the CSG • Public sector • Flat Tax • Retirement plans • Decrease of the corporate tax • Constitutional reform. rate 13 France Investment Briefing

GDP +2% in France in 2017, its highest level since 2011 Eurozone France Germany Spain United Kingdom 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (f) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 14 France Investment Briefing

Unemployment rate Marked improvement Eurozone France Germany Spain United Kingdom 28% 25% 23% 20% 18% 15% 13% 10% 8% 5% 3% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (f) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 15 France Investment Briefing

Foreign investment projects in France +16% in 2017 1400 1298 1200 1117 1014 962 1000 782 800 698 693 685 641 639 624 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 16 France Investment Briefing

France & Paris Region Macro economic Real estate Real estate The Grand Paris USPs view market market Express Real estate market 17 France Investment Briefing

Real Estate Investment in Europe France in the top 3 70 € Bn 60 € Bn 50 € Bn 40 € Bn 30 € Bn 20 € Bn 10 € Bn 0 € Bn UK Germany France Spain Netherlands Austria & Sweden Italy Poland Russia Switzerland 18 France Investment Briefing

Office prime yields and prime rents in Europe Prime yields Prime rents 1,600 € 6.00% 1,400 € 5.00% 1,455 € 5.00% 4.55% 4.50% 1,200 € 3.95% 3.75% 4.00% 1,000 € 3.50% 3.45% 3.30% 3.25% 3.00% 3.00% 800 € 3.00% 800 € 600 € 670 € 2.00% 520 € 400 € 490 € 425 € 380 € 1.00% 315 € 200 € 300 € 230 € 225 € 0 € 0.00% 19 France Investment Briefing

Comparison between economic growth and real estate cycles Paris Region Office Take-Up (m²) GDP in France (%) 3,500,000m² 5.0% 4.0% 3,000,000m² 3.0% 2,500,000m² 2.0% 2,000,000m² 1.0% 0.0% 1,500,000m² -1.0% 1,000,000m² -2.0% 500,000m² -3.0% 0m² -4.0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (f) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 20 France Investment Briefing

Real Estate Investment in France + 7% in 2017 Annual volume 11-year average 40 € Bn 35 € Bn 30 € Bn 25 € Bn 20 € Bn 15 € Bn 10 € Bn 5 € Bn 0 € Bn 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 21 France Investment Briefing

Investment in France by assets The year of logistic ? 3% 4% 7% 4% 9% 15% 14% 2016 2017 9% 65% 70% Offices Industrials & Logistics Retail Residential Hotel 22 France Investment Briefing

Financial rates compared to real estate rates Moving out ! Interest rate, 10-Year Government Bond Yield Prime Office Yields - Paris CBD 7% 6% 5% 4% 3% 220 bp 2% 1% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (f) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 23 France Investment Briefing

Take-up > 5.000 sq.m. First hand buildings preferred by major accounts First hand Second hand 1,400,000m² 1,200,000m² 1,000,000m² 800,000m² 600,000m² 75% 73% 400,000m² 73% 70% 67% 82% 74% 200,000m² 77% 0m² 2011 2012 2013 2014 2015 2016 2017 Q1 2018 24 France Investment Briefing

Take-up > 5.000 sq.m. A high pre-letting rate Pre-letting and turn key schemes Existing 1,400,000m² 1,200,000m² 1,000,000m² 800,000m² 600,000m² 400,000m² 64% 55% 51% 200,000m² 61% 40% 35% 61% 28% 0m² 2011 2012 2013 2014 2015 2016 2017 Q1 2018 25 France Investment Briefing

Most active investors on the French investment market according to their geographic origin 26 France Investment Briefing

Type of assets preferred in France at purchase 27 France Investment Briefing

Thank you. Arnaud Violette Colliers International France Business Development General Manager +33 (0)6 14 49 60 76 Arnaud.Violette@colliers.com