Paris commercial real estate sales slump to lowest since 2009
05 January 2024
(Bloomberg) -- Investments in Paris commercial real estate continued to fall in the fourth quarter of 2023, bringing yearly volumes to their lowest level since the global financial crisis.
Total deals for properties including offices, retail space and warehouses in the greater Paris area sank 63% from a year earlier to €1.1 billion ($1.2 billion) in the quarter, according to statistics provider Immostat.
This meant investments in Paris fell 56% in 2023 to €6.8 billion, the lowest yearly figure since 2009.
The rapid increase in interest rates over the past year or so drove up borrowing costs, bringing Europe's long real estate boom to a sudden halt. As a result, several developers are filing for insolvency and banks are taking provisions for credit losses.
Across France, total CRE deals plunged 61% to €2.5 billion in the fourth quarter, bringing the decline to 57% for the full year, according to Immostat.
In the greater Paris area, the average price paid for office space fell for the fifth consecutive quarter to about €6,570 per square meter, the lowest level in five years.
Immostat's figures only include deals by investors who seek to earn rent income.
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