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JLL has just launched the sale of a mixed-use complex at rue Réaumur in Paris’ second district with an asking price of €150 mln.

Located in the Opera district near the stock exchange, the building at rue Réaumur 92 is owned by a private investor and comprises 11,000 m2 of office and retail space multi let to several tenants including Auchan and Price Minister.

'French real estate is benefitting from a general euphoria and is attracting capital from all over the world, particularly but not only from the US or dollar-denominated countries, where the strong currency is making real estate investments in Europe quite advantageous,’ commented Stephan von Barczy, head of JLL in France and advisor on the sale.

With French government bonds at 0.6%, real estate risk premium has reached a historic high and is driving growing capital to the sector, he added. ‘There is healthy competition between local and foreign investors. The French retail funds called SCPIs in particular have collected as much as €3 bn in 2014, which is the highest figure on record.’

Meanwhile, prime Paris yields have compressed by 75 basis points from 4.25% a year ago to 3.5% at present.

Von Barczy expects nevertheless the market to see a decrease of transactional activity this year, largely due to a lack of supply. ‘We have about €2 bn of sales instructions today but nevertheless 2015 may not match the levels of 2014 because there is too little product on the market, especially compared to last years’ mega transactions such as Coeur Défense or Beaugrenelle.'

He expects commercial real estate investment to reach €14-15 bn in the Paris region this year, versus €17 bn a year earlier.