The negative total returns of French commercial real estate investments moderated in the first half as retail assets outperformed other sectors, the MSCI France Biannual Property Index shows.
Standing assets generated a negative total return of -2.8% in the first half of 2023 and -6.8% from a year earlier. Capital growth was negative across all sectors and was -10.1% over twelve months to June 2023.
The performance of retail assets remains stable, however, with a positive total return (combining capital growth and income return) of 0.4%. The negative returns for the residential and industrial sectors moderated in the first six months of the year.
By contrast, total returns for the office sector continue to deteriorate across all geographic areas, with a 6-month capital growth at -5,7% and -10.5% over 1 year, a decrease driven by the yield increase, and a vacancy rate that remains high in the Western Crescent of Paris, and in the inner and outer suburbs of the French capital.
The MSCI France Biannual Property Index tracks the performance of more than 1,000 assets with a value of €60.8 billion as of June 2023 and now includes residential. It is made up of 52% offices, 19% logistics/business premises, 18% retail, 10% residential and 1% other assets.
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