French cross-border investment in European real estate hits €3.2bn in H1

French cross-border investment in European real estate hits €3.2bn in H1

French capital invested in European real estate totalled nearly €3.2bn in H1 2023, accounting for 10% of all cross-border investment, according to Savills latest research.

This is more than the 5% share recorded last year and the 6% average of the past five years.   

Spain stands out as the big winner, attracting 32% of French capital outflows against the 13% five-year average, says the international real estate advisor.

Amongst others, Remake SCPI bought Leitat Technological Centre in July for €24.5 million while Perial purchased Eurostar Sitges Hotel for €63 million and Intergestion acquired a Carrefour portfolio for €42.5 million, both in March this year.

The UK is the second largest destination for French capital, accounting for 18% of all French cross-border investment in Europe. This is in line with the long-term average. Among the substantial acquisitions recorded was the purchase of 191 W George Street, situated in the CBD of Glasgow, by Corum from NFU Mutual for €42 million and the acquisition of two laboratories, in Oxford and Witney by Kadans Science Partner, a subsidiary of the Axa Group.

Italy is the third largest destination for French capital, capturing 18% of French cross-border investment, an increase from the previous five-year average of 13%. Key transactions by French investors included the acquisition of a senior care home portfolio of six properties by Axa IM via Namira SGR, and the Adeo portfolio which was traded in a sale and leaseback to Polis Fondi and LeadCrest Capital Partners for €70 million.

James Burke, Director, European Capital Markets & Global Cross Border Investment at Savills, says: “Whilst French capital outflows predominantly targeted office and retail properties in recent years, cross-border investment out of France is now more evenly spread across different asset classes.

“Senior housing and care homes have notably gained traction, accounting for 18% of their foreign investment since the beginning of the year. This shift is largely attributed to several portfolio sales in Italy, Belgium, and Germany.”

Lydia Brissy, Director of European Research at Savills, says: “Despite an ostensible focus on Europe’s south, markets in northern Europe continue to draw interest from Paris, with notable transactions in the Netherlands and Ireland amongst others. Corum, for instance, acquired the George Quai House office building located in Dublin’s CBD from Henderson Park for €80 million.

“Over the past three years, French SCPIs (Sociétés Civiles de Placement Immobilier) have intensified their overseas activities. This strategic diversification has been driven by a dual aim: to broaden the scope of their portfolio and to explore lucrative opportunities yielding attractive returns in other European nations. We expect their cross-border activity to continue over the coming months.”

As per ASPIM (Association Française des Sociétés de Placement Immobilier), SCPIs collected a total of €4.1 billion in H1 2023. Whilst this reflects an annual decrease of 22% on the back of a record year, this is 9% above the past 5-year average. Moreover, since the onset of the year, SCPIs recorded robust annual performances. In accordance with the IEIF (Institut de l’Épargne Immobilière et Foncière), the annual evolution of the overall performance index of SCPIs reached 4.33% in March.

Click here to receive CRE Herald’s weekly newsletter, news alerts and insights!