Paris is the top city in the world for cross-border real estate investment this year, seeing more than $6.5 billion (A$9.6bn) in investment in the six months to June, more than any other city in the world.
Buyer demand largely seen from global institutional investors in Asia and Europe has helped bolster the French capital ahead the likes of London and New York, reveals JLL.
Much of the foreign investment in the first-half of this year was focused on Paris’ CBD and the city’s La Défense submarket.
JLL’s global capital markets research team Pranav Sethuraman said the largest deal came from Europe, with investment manager Swiss Life securing a portfolio of 28 offices for more than EUR1.7 billion (AU$2.8bn).
“Appetite for Paris is reflective of global institutional investors’ search for opportunities in gateway cities across Europe,” Sethuraman said.
“Large assets, either in portfolios or standalone, are what’s driving investment in Paris.”
While investors from Asia, and in particular South Korea, were behind much of the increased investment activity for the first half of the year, according to the JLL research.
Hana Financial bought the Cristalia office building in the Rueil-Malmaison district west of Paris for EUR171 million (AU$280m) through JR AMC, a Seoul-based REIT manager.
A renewed interest in the commercial market combined with French President Emmanuel Macron’s pro-business stance has seen a resurgence. Macron has stated he plans to make France a ‘startup nation’.
''I know France is an old country. But this is the beginning of a new dynamic, a new wave. And this where you must be. To invest, to work, and to invent,” Macron said
In May, the Administrative Court of Paris approved Paris’ first skyscraper since 1973. The approval will see a 41-storey triangular tower designed by Herzog & de Meuron, located in the Porte de Versailles neighbourhood, in Paris' 15th arrondissement.
Increased investor interest has impacted prices in the office market.
The city’s prime yields are down by 25 points to 2.75 per cent, making Paris the most expensive office market in Europe.