the investment market - q3 2016 - microsoft · pdf filethe investment market ... singaporean...

THE INVESTMENT

MARKET ÎLE-DE-FRANCE / CBD FOCUS

Q3 2016

446

820 1 3

72

2 6

22

900

1 4

51

2 1

54

4 2

41

1 3

51

2 1

44

2 7

40

5 6

33

1 4

43

3 5

09

2 4

04

4 7

66

1 7

58

2 6

51

3 6

85

3 6

24

3 1

18

5 4

89

2 6

66

5 4

44

4272

3507

4321

6042

2196

4554

5571

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

12 000

13 000

14 000

15 000

16 000

17 000

18 000

19 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2009 2010 2011 2012 2013 2014 2015 2016

In m

illi

on

€

2009 € 5,2 billion

2010 € 8,7 billion

2011 € 11,9 billion

2012 € 12,1 billion

2013 € 11,7 billion

2015 € 18,1 billion

2014 € 16,7 billion

+7%: after a mixed start to the year, the

volume invested has gradually increased,

to reach €5.6 billion over this Q3 and a

total of €12.3 billion over the first nine

months of the year

Q3 was characterised by a significant

number of very large transactions (+ €200

million): there were nine, representing 40%

of volumes invested

In terms of geography, the organisation of

the market has endured: the CBD

continued to dominate as the favourite

destination of investments, with close to

€3.4 billion spent, followed by the Western

Crescent (€2.7 billion) and La Défense

(€2.1 billion).

The market continued to be dominated by

French investors, who accounted for over

70% of amounts invested. However, we

note the surge of investors from Korea and

Singapore and the return of the Americans

THE INVESTMENT MARKET – Q3 2016

ÎLE DE FRANCE / CBD FOCUS

Investment volumes

€5.6 billion over Q3 2016 Source : Knight Frank

Geography of volumes invested

Strong activity in the CBD and La Défense Source : Knight Frank

La

Défense

17%

Western

Crescent

22%

Paris

CBD

27%

Rest of

Paris

inner city

16%

Inner

Rim

8%

-23%

+77%

-30%

-37%

Paris CBD Rest of Paris

inner city La Défense

Western

Crescent Inner Rim Other

Total

Île-de-France

3 381 1 994 2 062 2 721 990 1 173 12 321

Volume invested in 2016 (in billion €)

Market share in the volumes

invested in Ile-de-France in

2016

Trends in volumes invested in

2016 compared with 2015

+89%



€1.5 billion: the CBD continued on the dynamic

of the previous quarter. The amount invested

since the start of the year totalled close to 3.4

billion in the CBD, which is an increase of 77%

compared to 2015

The upsurge in activity in the second quarter

enabled the CBD to return to its traditional

position in the Greater Paris region, attracting

27% of volumes invested over nine months in

the region

This activity is boosted by several major

transactions, with notably the sale of the portfolio

comprising 1-5 rue d'Astorg and 14-16 rue de la

Ville l'Evêque, sold by Société Générale to the

Singaporean GIC for €500 million, or that of

Paris Bourse, sold for over €350 million

The success of the CBD shows that investors

are attracted to Core assets, despite the

continuous increase in their prices and the Prime

yield staying close to 3%

151

455

272

1 0

46

573

448

303

514

247 632

707

878

160

2 1

11

702

982

625

899

268

943

353

1 4

39

893 1 3

37

689

649

572

1 5

20

342

1520

1519

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

2009 2010 2011 2012 2013 2014 2015 2016

In m

illi

on

€

Quarterly Volume Annual Volume

2009 € 1,92 billion

2010 € 1,84 billion

2011 € 2,46 billion

2013 € 2,74 billion

2012 € 3,96 billion

21% 21%

33%

37%

23% 24%

19%

2014 € 4,02 billion

2015 € 3,43 billion

CBD Focus

+77% for the first three quarters compared to 2015 Source : Knight Frank



Date Asset Type of Asset Submarket Area Price

(in millions €) Buyer Seller

April

2016

Tour First Office La Défense 80 000 800 Axa Investment

Managers Real

Assets

Beacon Capital

Partners

Sept.

2016

Portefeuille Alpha:

Tour Egée/ Le

Stadium/ Orsay

Office Portofolio 81 000 700 Amundi Kanam

July

2016

Portefeuille:

1-5 rue d'Astorg /

14-16 rue de la

Ville l'Eveque

Office CBD 24 100 500 GIC (Government of

Singapore Investment

Corporation)

Société Générale

June

2016

65-67 Avenue des

Champs Elysées

Retail/Office

CBD 10 500 490 Emirat du Qatar Thor Equities LLC

Meyer Bergman

March

2016

Villebon 2 Shopping Center Outer Rim 47 500 159 Crédit Agricole

Assurance/ ACM Vie

AS

Hammerson

Jan.

2016

Tour Alto Mixed development

project

La Défense 51 000 55 Abu Dhabi Investment

Authority

UBS Real Estate

Jan.

2016

44 rue Paul

Langevin, Ris

Orangis

Warehousing Outer Rim 46 200 34,4 EPF Raiffesen

Examples of transactions Source : Knight Frank



87%

8% 5%

Jan/Sept 2015

85%

12%

3%

Jan/Sept 2016

Office Retail Other Assets

Breakdown by asset type

Sustainability of the breakdown by asset type Source : Knight Frank



59%

17%

24%

Jan/Sept 2015

59% 24%

17%

Jan/Sept 2016

Core Core Plus Value Added/ Développements en blanc

Breakdown by risk profile

The winning return of Core+ assets Source : Knight Frank



16%

21%

23%

40%

Jan/Sept 2016

Less than 50 millions € 50 to 100 millions €

100 to 200 millions € More than 200 millions €

13%

23%

34%

31%

Jan/Sept 2015

Breakdown by transaction size

Re-concentration of the market on large deals (+ €200 million) Source : Knight Frank



Source : Knight Frank

71%

7%

8%

10% 4%

France Euro Zone Europe (excl. Euro Zone) Northern America Asia / Middle East Others

66% 2%

9%

6%

7%

10%

Jan/Sept 2015 Jan/Sept 2016

Breakdown by purchasers' nationalities

Preferred territories Of French investors Source : Knight Frank



Prime yields are currently at a historic low, between

3% and 3.25% in the CBD

Despite this trough and the increasing gap separating

it from most of the other markets in the Paris region,

the CBD remains popular with investors

In a more discrete and more moderate way, the

squeezing of prime yields is spreading to other

markets in the Greater Paris region, like La Défense,

whose prime yields are falling below the 5% level this

year

The yield gap between Core, Core Plus and other

asset classes tends to increase within each

geographical sector, generating interest among

investors for Core Plus and Value Added assets,

which opens up opportunities in less saturated

segments

The spread between prime and bond yields, a key

factor in the success of the real estate segment

among investors, continues to show a big advantage

for real estate assets (293 basis points)

3.13%

4.88%

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

8,00%

9,00%

10,00%

1982

1983

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1996

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1998

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2000

2001

2002

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2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

3Q

2016

CBD La Défense

Prime Yield

Stabilisation of the rates on Prime assets Source : Knight Frank



3,00

4,00

3,75

4,75 4,75 4,75

3,75

4,50

4,00

4,50

5,00

4,75

3,25

4,25

4,00

5,00 5,00

5,25

4,00

4,75

4,50

4,75

5,25

5,00

2,50

3,00

3,50

4,00

4,50

5,00

5,50

Pa

ris C

BD

Pa

ris 1

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ris 1

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5

Pa

ris 1

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0

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fen

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rth

ern

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/ L

evallo

is

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ri D

éfe

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rth

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r R

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rn In

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r R

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uth

ern

In

ne

r R

im

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%

Prime Yields

Stable geography in Q3 2016 Source : Knight Frank



Investment volumes in Ile-de-France and Prime/bond yields spread Source : Knight Frank

-8,00%

-6,00%

-4,00%

-2,00%

0,00%

2,00%

4,00%

0

5

10

15

20

25

19

83

19

84

19

85

19

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19

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19

88

19

89

19

90

19

91

19

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19

93

19

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19

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19

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19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

se

pt.

-16

Spread between rate of yields/bonds Volumes invested in the Paris Region

Premium for bond

Premium for property

ES

TIM

AT

ION



the investment market - q3 2016 - microsoft · pdf filethe investment market ... singaporean...

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