Commercial property investment in France dropped by 57% year-to-year totalling EUR 9.4 bn in the first nine months of 2008, according to the latest market view report issued by CB Richard Ellis. The downturn was a result of more challenging lending markets and a loss of investor confidence. Investment activities in the third quarter amounted to EUR 2.2 bn, down from EUR 3.1 bn and EUR 4.1 bn in the second and first quarter respectively.
Commercial property investment in France dropped by 57% year-to-year totalling EUR 9.4 bn in the first nine months of 2008, according to the latest market view report issued by CB Richard Ellis. The downturn was a result of more challenging lending markets and a loss of investor confidence. Investment activities in the third quarter amounted to EUR 2.2 bn, down from EUR 3.1 bn and EUR 4.1 bn in the second and first quarter respectively.
'The pockets of resistance that upheld the market at the start of the year have gradually run out of steam,' the global property advisor said in a statement. The French provinces saw almost half of the investment spent in the first quarter of the year, and still they were less affected than the Ile-de-France region, where investment plummeted by as much as 62% to EUR 6.5 bn in the first nine months.
Investment funds were very active at the beginning of the year but have been gradually pulling out of the market. Meanwhile property companies are faced with the difficulty of raising capital on stock markets. Institutional investors, which tend to be less affected by the credit squeeze, accounted for 44% of investment activity in the 2008 year to date.
The French investment market was dominated by local players, with French companies representing half of the investment this year. German investors were responsible for 14% of investment activity, while the Americans and the British adopted a wait-and-see attitute, representing 12% and 4% of investment respectively.
