March 5, 2025 9:00 AM
Newmark has released a study on North American investors and their key role in the French real estate market.
Emmanuel Frénot, Deputy Chief Business Officer at Newmark, commented: “In France and globally, North American investors now acquire properties both for their own portfolios and on behalf of funds with diverse origins and structures. Analysing the activity of North American investors in France thus provides insight into the broader transformations of the global real estate market.”
SEE BELOW FOR KEY HIGHLIGHTS OF THE REPORT:
- North American investors dominate global real estate, accounting for nearly 50% of cross-border investments in 2024.
- With a leading position in Europe, North American investors invested €36 billion in the continent in 2024.
- North American investments in France surged 150% year-over-year to €3.1 billion, representing 42% of foreign investments. This resurgence outpaced British and German investors.
- North American investors have broadened their scope beyond office to include all asset classes, mainly focused on the industrial sector (€2.4 billion), with limited activity in retail, highlighted by Blackstone’s acquisition of the “Mandarin Oriental” space on Rue Saint-Honoré.
- Office Investments:
- Most office investments were in buildings for conversion, such as Hines’ purchase in Charenton for a student housing project, which signifies a notable shift towards alternative assets as offices traditionally made up 60% of North American investments from 2010 to 2020, followed by industrial (24%) and retail (16%).
- The Paris office market offers significant opportunities, driven by the “flight to quality” trend. High-end assets in the CBD are in demand, with limited supply pushing prime rents up 23% in the past three years. Exceptional “trophy assets” command premiums of 6% above prime rents.
- Outside the CBD, new high-quality projects are expected to boost rents, attracting North American investors. Suburban markets also offer value-add opportunities, with improving rental fundamentals and widening rent gaps making them increasingly attractive despite high vacancy rates.
- The outlook for office has improved, with volumes growing 20% in 2024, leasing activity rebounding and 37 of the 50 largest U.S. office markets seeing increased transactions, including San Francisco (+45%), Manhattan (+26%), and Dallas (+22%), which inevitably influences how North American investors operate globally.
François Blin, Chief Business Officer at Newmark France, commented: “In the current context, North American’s return to office investments will prioritize markets with strong fundamentals. The Paris region offers clear advantages, such as deep market liquidity, an extensive and improving transport network and lower remote work adoption compared to other global cities.”
“Investors can capitalize on discounted tertiary assets in strong submarkets. This office sector ‘bet’ is one that some North American and broader foreign investors will likely pursue in 2025, particularly in established Western hubs and key Grand Paris locations.”
Read the full report here
and visit https://www.nmrk.com/insights to explore more Newmark Thought Leadership.
About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark’s comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform’s global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. For the twelve months ended December 31, 2024, Newmark generated revenues of over $2.7 billion. As of December 31, 2024, Newmark and our business partners together operated from approximately 170 offices with more than 8,000 professionals across four continents. To learn more, visit nmrk.com or follow @newmark.
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