Paris at nightParis Ile de France, the economic development agency for the Paris region, Europe’s largest property market attracted EUROS 1.67 billion worth of investment capital from Middle East investors in 2006.
The Paris region is Europe’s leading business real estate market with over 100 million square metres of commercial property. The French capital has witnessed a significant increase in new investment, the total amount of investment in 2006 reached EUROS 18.6 billion, a level never seen before, and an increase of 56% compared to 2005.
Vincent Gollain, Director of Strategy & Economic Analysis, Paris Region Economic Development Agency commented, “The Paris region is extremely dynamic and attracts significant investment from the Middle East. Assets such as diversity of rental demand, market liquidity, transparency and transaction security have all contributed to our successful track record. Inward investment flows have averaged EUROS 11.4 billion over the past 5 years.”
During that period, Middle East investment has grown significantly and now represents over 9 per cent of total investment in the Paris region. This is now close to the volumes invested by German and British investors at 13 and 10 per cent respectively. However, the French themselves continue to top the investment league table with 36 per cent with the USA on 21 per cent of total investment.
With a Gross Domestic Product (GDP) of 480 billion Euros in 2005, representing 29 per cent of French GDP and 5 per cent of European GDP, the Paris region has long since proved to be a magnate for foreign investment and is rated as the highest in Europe.
“One of the secrets of the Paris region is its ability to generate high returns for investors, with office space returning over 10 per cent, industrial at 11 per cent and retail providing over 13 per cent,” added Gollain.
One of the key success factors for the Paris region offering is the wide range of competitive, high-quality real estate options to help companies develop and diversify their projects effectively. Office space currently under construction or in the planning stage tops 3 million square metres, with potential for a further 5 million square metres with competitive rates of EUROS 700 per square metre, some 30 per cent cheaper than equivalent projects in its great rival city, London.
One of the major urban development projects in the Paris region is La Defense, a leading European business centre, just 15 minutes from the centre of Paris, which will be home to international heavyweights such as Axa, Arcelor, and France Telecom. Consisting of 3.3 million square metres, the development will accommodate over 3,600 businesses and create 150,000 jobs.
Other prominent projects include the new Parisian business and university neighbourhood, the Landy-Pleyel business park next to the Stade de France in northern Paris and the Melun project where a new 400 acre aeronautical business park is being built around the French aeronautical giant Snecma.