Just €4.1 billion was sold in commercial real estate in France during the first half of 2024, down 39% from the same period of 2023, according to data firm ImmoStat. The decline is more moderate if only the second quarter is analyzed, with an annual decline of 29%.

"The situation is much more mixed than it used to be, with a new-found stability between sellers' and buyers' expectations, which is conducive to successful marketing," said Nils Vinck, head of capital markets France at brokerage Cushman & Wakefield. "Over the past two years, we have suffered from the market deteriorating faster than the speed of deal execution. This is no longer the case today, thanks to a better sustainability of asset values in the most attractive submarkets," he added.

This view was shared by brokerage CBRE, which deemed the results "honorable" and highlighted "some good news" during the second quarter in its own report, such as the recovery in the industrial and logistics segment. That was the only asset class in "commoditized" real estate to record rising annual performances, with deal volume up 7% year-over-year.

Another positive point, according to the Advisory Board, is the renewed depth of the Ile-de-France office market, "even if buyers remain highly selective, in a market that is highly polarized" around central Paris.

Nicolas Verdillon, managing director of Investments Properties at CBRE, warned that "the initial results of the French parliamentary elections have blurred investors' projections and further postponed the prospects of recovery, but this time without any visibility on the landing zones."

The asset classes are not all in the same phase of the correction cycle. Logistics, at €1.5 billion in deal volume after a rise in the first quarter, is seeing this momentum continue and accounts for almost 37% of total investment in France. Retail (€907 million committed, down 51% for the year) maintains its position at around 21% of commitments, while office assets (€1.8 billion, down 55%) continue to suffer from the questions raised by the advent of hybrid working, and accounted for around 42% of investment volumes in the first half.

"Admittedly, the results are still disappointing, but they need to be qualified," said Aymeric Sevestre, head of office, Paris Région, at Cushman & Wakefield. As the period of stabilization of European central bank key lending rates, coupled with the fall in appraisal values, has led to greater liquidity in the market, the brokerage said investors "are once again convinced that Paris offers a wealth of opportunities, and that the time has come to seize them."

According to ImmoStat results, €1.9 billion of commercial real estate was transacted in the Paris region in first-half 2024, down 57% from a year earlier, including €1 billion in the second quarter, down 49%. In a press release, data firm GIE said the average price of all types of office space purchased in the Paris region in the second quarter of 2024 was €5,800 per square meter, including transfer taxes, down 23% year-over-year.

In the second quarter, prime yields fell slightly for offices to 4% (vs. 4.25% in Q1), and remained stable for logistics (4.75%) and retail (4.25%). "While the benchmark prime yield stabilized at around 4.25% on July, we are seeing very high elasticity depending on asset size, with rate differentials ranging from 3.75% on small-volume ultra prime to over 4.5% on transactions worth more than €150 million," said Olivier Ambrosiali, deputy managing director in charge of sales and investment at BNP Paribas Real Estate Transaction France.