Newmark dedicates a study to North American investors and their key role in the French market. The study deciphers the evolution of their investment strategy, which has become increasingly diversified, and provides an insight into the reasons behind the attractiveness of the French market.
According to the study conducted by Newmark, North Americans have dedicated an average of €430 billion to investment every year since 2010, i.e. around half of the sums committed worldwide. Outside their borders, again since 2010, they have committed €1,100 billion, or around 40% of all cross-border investments. Despite a difficult market context due to the economic slowdown, political uncertainties and the war in Ukraine, Europe remains a priority target for them, with €36 billion committed in 2024, or 43% of all cross-border investments on the continent.
Historically, France has been the third most popular European market for North American investors, behind Germany and the UK. Although their presence in France was limited in 2023, they returned in force in 2024. "At €3.1 billion, the amounts committed by North Americans in France last year jumped by 150% in one year, while those of the French fell by 33%," explains François Blin, Chief Business Officer at Newmark. With 42% of all foreign investment in France in 2024, North Americans have thus consolidated their dominance, ahead of the British and Germans.
In 2025, they should still play the leading role in France, and more widely in Europe, according to Newmark. With a potentially larger number of assets coming onto the market, better financing conditions, a more advantageous exchange rate and real estate prices that have corrected significantly since 2022, the context is favorable. While opportunistic and value-added strategies will remain in the majority, some players, including new entrants, will also target core products.
For the past two years, North Americans have been focusing on the industrial market, investing €2.4 billion. Before 2020, this market accounted for an average of 21% of their investments in France, all asset classes combined, compared with 50% since 2021 and 77% in 2024! The share of retail has remained fairly modest (at 6% in 2024, compared with an average of 15% since 2010), swollen in recent years by the acquisition of retail premises on the outskirts of Paris, or of prime "pieds d'immeuble" in Paris.
Also according to this study, in the office sector, North American investors have mainly been involved in the purchase of buildings to be converted, such as the one acquired by Hines in Charenton to convert it into a student-dominated residential complex. Since 2010, 21% of their service-sector investments have been concentrated in the CBD. They had a strong presence in the La Défense business district in the late 1990s and 2000s, and are now less active, although they retain some emblematic assets there (Areva and W, Colisée Gardens, etc.).
North Americans have gradually diversified their portfolio, notably by wearing the dual hats of investor and operator. These "alternative" assets still account for only a modest proportion of their investments in France. These include serviced residences (Greystar or Hines), or data centers (Brookfield, Blackstone, etc.).
Finally, Life Sciences, a market segment that is highly developed in North America, is still relatively underdeveloped in France. "On the alternative market, real estate supply remains very limited, restricting the ability of foreign investors, particularly Americans, to significantly increase their commitments," notes Emmanuel Frénot, Deputy Chief Business Officer at Newmark.
Is there light at the end of the tunnel for office space?
Returning to the office market, the horizon is far from clear, but the context seems less negative than it was a few months ago. The 20% increase in office investment volumes in the United States in 2024 compared with 2023 suggests that rental activity is picking up. Even if the recovery of the US market does not remove all the uncertainties surrounding the future of the office sector, it undoubtedly reduces investor mistrust. The time has therefore come for a more nuanced approach, paving the way for a return to this asset class by North American players.
"The evolution of the American office market necessarily influences the way in which investors from that continent operate on a global scale," emphasizes François Blin. However, the Paris Region offers undeniable advantages, such as great market depth, a dense and constantly-improving transport network, and telecommuting that is less common than in other major global metropolises".
The highest-quality assets are particularly sought-after in the CBD, but more widely in other Parisian districts, such as the Circle building in the 15th arrondissement, a former Cristal Tower renovated by Tishman Speyer. Finally, there are also opportunities on the outskirts, in a value-added niche where American investors usually stand out. "François Blin concludes: "In 2025, some North American investors, and more broadly foreign investors, will undoubtedly take up this office "gamble" in the established western sectors and main hubs of Greater Paris.