Prime yields, known as cap rates in the US, remained unchanged in the first quarter of 2025 for all asset classes surveyed, according to the latest Savills France survey.
"The stabilization already observed in the second half of 2024 is therefore confirmed, and explains the upturn in transactional activity: it reflects a greater ability to find a common ground between sellers and buyers", said the consultancy headed by Angus Potterton.
Prime office yields in the Paris central business district have remained unchanged for over a year, at around 4.25%, or even 4.5% for large volumes. On the other hand, Savills France is seeing rates approaching 4% for smaller assets (under €50 million), or even slightly below this figure when there is a possibility of rental value recovery in the short to medium term.
Outside the CBD, the geography of valuation for the best office assets is also stabilizing, at least in "live-work-play" locations such as the Marais, République or some districts of the 11th and 12th arrondissements. Here, yields are fluctuating between 4.5% and 5.25%. The same applies to Neuilly-Levallois.
"Elsewhere in Paris and the Île-de-France region, it is still too early to talk about yields stabilizing, in the absence of a sufficient benchmark based on transactions", said Savills, indicating that for core-plus or value-added offices, "the assessment and remuneration of risk is done on a case-by-case basis".
In the regions, the "prime" office yield remains set at 5.5% in the first quarter of 2025. Nor has it changed in Lille (6%) or Bordeaux (6.25%).
What about other asset classes?
For industrial and logistics assets, it remains at 4.75% for class A warehouses in the Paris region at the end of the first quarter of 2025. Similar values are observed in Auvergne-Rhône-Alpes, around Lyon. Prime rates are slightly higher outside these two flagship locations, ranging from 4.95% in Hauts-de-France (Lille) to 5.25% on the Mediterranean coast near Marseille.
In retail, the benchmark rate for the best shopping centers remains unchanged at 5.5%. However, this is largely theoretical, given the low number of benchmark transactions. For retail premises at the foot of buildings in Paris, the prime rate is 4%. It has not moved́ since the end of 2023, but could compress slightly over the coming months. On more commoditized boutiques, the rate is significantly higher, settling instead at around 6.25%. Finally, the "prime" rate for retail parks is also unchanged at 6%.
The same applies to "prime" rates for student residences (4.5%) and those for senior residences (4.75%).