GRIFrance GRI - Tech trends disrupt investment appetite
What does value truly mean in France under Europe’s low yielding interest rate environment?
May 30, 2018Real Estate
More than 120 GRI Club members and participants gathered in Paris on 29th and 30th of May for the inaugural France GRI, proving the appetite amongst Europe’s most senior real estate players was certainly curious and by most accounts, strong indeed. Investment strategies were top of the agenda amongst investors, with differing perspectives shared around how far up the risk curve investors are prepared to go in the search for yields.
Investors, lenders and developers reached a consensus that while yields were now stabilised, they were still at a very low point, and are unlikely to bounce back in any formidable way. Such views raised discussions around what value-add truly means in the present low interest rate environment.
Whilst it was felt that low yields are evidently not discouraging GRI Club members and other investors from investing in most core asset classes across France, Offices remain the clear trophies being sought by local and international investors. Interestingly, it emerged that it wasn’t just Paris benefitting from this ‘office goldrush’ as the search for higher yields was encouraging more regional investment opportunities.
Disruption, innovation and appetite for alternative asset classes were tested amongst the friendly and collegial style discussions. There was an interesting debate around co-working; its long-term viability, and predictions for how the business model will change over coming years. Adeline Attia (UB Trends), Robin Rivaton (Real Estech), Frederic Ciuntu (Global Real Estate, L’Oreal) and Christophe Burckhart (MD, Regus) added their voices to the discussion and shaped a stimulating exchange.
In terms of development and demand, large-scale events such as the Olympics, and projects such as Grand Paris are felt to be accelerating investor interest, however political dawdling (when it comes to certain elements of the projects) means that investors are holding off in the immediate future, adopting a “wait and see” strategy.
Talks intensified around the timeframe for France’s economy and real estate to experience the ‘Macron effect’ in concrete terms. Some pessimistic investors pointed out it will take a full 10 years before we feel any significant presence of international capital in French real estate. On the other hand, a few argued that this sought after transformative effect is already here; Brexit has paved the way for Paris to be the new ‘Europe HQ’. The question now is whether the French real estate market can keep up with Germany, UK and elsewhere.
The GRI Club France Advisory Board
The conference opened with a private meeting among the Advisory Board members of GRI Club France to plan ahead upcoming GRI Club France activities during second half of 2018 and into 2019.
In attendance were Jean-Philippe Olgiatti (Head of Continental Europe, Blackrock), Ines Reinmann-Toper (MD Real Estate, Edmond de Rothschild), Arnaud Taverne (Directeur General, CDP GPI), Patrice Genre (President, La Francaise Real Estate Partners), Tania Bontemps (Presidente, Union Investment), Emanuele Dubini (Managing Director France), Vincent Mahe (President, Ampere Gestion).
Investors, lenders and developers reached a consensus that while yields were now stabilised, they were still at a very low point, and are unlikely to bounce back in any formidable way. Such views raised discussions around what value-add truly means in the present low interest rate environment.
Whilst it was felt that low yields are evidently not discouraging GRI Club members and other investors from investing in most core asset classes across France, Offices remain the clear trophies being sought by local and international investors. Interestingly, it emerged that it wasn’t just Paris benefitting from this ‘office goldrush’ as the search for higher yields was encouraging more regional investment opportunities.
Disruption, innovation and appetite for alternative asset classes were tested amongst the friendly and collegial style discussions. There was an interesting debate around co-working; its long-term viability, and predictions for how the business model will change over coming years. Adeline Attia (UB Trends), Robin Rivaton (Real Estech), Frederic Ciuntu (Global Real Estate, L’Oreal) and Christophe Burckhart (MD, Regus) added their voices to the discussion and shaped a stimulating exchange.
In terms of development and demand, large-scale events such as the Olympics, and projects such as Grand Paris are felt to be accelerating investor interest, however political dawdling (when it comes to certain elements of the projects) means that investors are holding off in the immediate future, adopting a “wait and see” strategy.
Talks intensified around the timeframe for France’s economy and real estate to experience the ‘Macron effect’ in concrete terms. Some pessimistic investors pointed out it will take a full 10 years before we feel any significant presence of international capital in French real estate. On the other hand, a few argued that this sought after transformative effect is already here; Brexit has paved the way for Paris to be the new ‘Europe HQ’. The question now is whether the French real estate market can keep up with Germany, UK and elsewhere.
The GRI Club France Advisory Board
The conference opened with a private meeting among the Advisory Board members of GRI Club France to plan ahead upcoming GRI Club France activities during second half of 2018 and into 2019.
In attendance were Jean-Philippe Olgiatti (Head of Continental Europe, Blackrock), Ines Reinmann-Toper (MD Real Estate, Edmond de Rothschild), Arnaud Taverne (Directeur General, CDP GPI), Patrice Genre (President, La Francaise Real Estate Partners), Tania Bontemps (Presidente, Union Investment), Emanuele Dubini (Managing Director France), Vincent Mahe (President, Ampere Gestion).