€12.1 billion invested in business real estate in 2024

The insight is real: €4.1 billion were invested in business real estate during Q4 2024, an increase of... 27% compared to Q4 2023, according to ImmoStat figures released today.

However, there is nothing to scare away the clouds hanging on a market that has just reached the €12.1 billion mark committed during the last financial year, which is less than in 2023 (-2%). A market that is still suffering from the lag associated with the rise in past rates and the continuing lack of adequacy between supply and demand, generating a contraction in invested volumes, notes Cushman & Wakefield.

The “simmering” observed over the last quarter can be explained, in part, “by the stabilization of key rates and real estate yields”, especially in Île-de-France. Prime rates in Paris offices (QCA) remained at 4.00%-4.25%, while rates in the periphery continued to decompress, for assets in Peri-defense and in the eastern, northern and southern areas. Other asset classes also showed signs of stabilization. The retail sector in Paris saw its rate consolidate around 4.25%, while logistics in Île-de-France confirmed its resilience with rates of 4.75%.

“This gradual catch-up over the past year reflects a renewed interest from investors, especially in core assets in central locations,” explains Aymeric Sevestre, Head of Capital Markets at Cushman & Wakefield France.

“Although we can't talk about a real recovery, volumes increased gradually, every quarter in 2024, and the fourth quarter brought some good news, especially on the office market, which regained some consistency at the end of the year,” confirms Nicolas Verdillon, Managing Director Investment Properties at CBRE France.

^{“Offices end the year well with €1.9 billion committed in the 4th quarter for an overall volume of nearly €4.9 billion over the whole year (-27% over one year)”, explains Olivier Ambrosiali, Deputy CEO in charge of the Sales and Investment division at BNP Paribas Real Estate Transaction France, thus details Olivier Ambrosiali, Deputy CEO in charge of the Sales and Investment division of BNP Paribas Real Estate Transaction France.}

“A few transactions worth more than €100 million (Ville l'Evêque, Le Baron, Le Baron, Gaîté-Montparnasse), but also several finalization of transactions < €50 million fuelled office activity in Île-de-France at the end of the year and contributed to slowing the fall in its volume”, insists Nicolas Verdillon.

Note that the average price of offices purchased in Île-de-France during Q4, all types combined, was €5,950/m² (including rights), which represents a decrease of 9% over one year.

At the end of 2024, businesses posted a decrease (-23% over one year) for an invested volume of €2.4 billion. On the other hand, the logistics segment (€4 billion) confirmed its good momentum with an increase of +105% over one year.

“While the share of industrial assets reached an unprecedented level this year, traditional asset classes are also seeing their market shares decrease in favor of residential assets, which are expected to accumulate around €3.5 billion in 2024, and hotels, for which the investment volume should be at least €2.5 billion,” explains Stephan von Barczy, Director of the Investment Department at JLL.

“I&L is clearly the winning asset class of the year 2024 in commoditized real estate: with nearly €5 billion invested, it represents 41% of volumes and is located right in front of the office”, continues Nicolas Verdillon. “This is unprecedented when it represented around 25% of volumes since 2021 and even less before. ”

How do you look to the future with confidence? “The return to more favourable financing conditions should relaunch the market in 2025”, analyzes Barbara Koreniouguine, CEO of Cushman & Wakefield France. “The fall in key rates initiated since the summer is a key lever for action to restart activity in the commercial real estate sector.

“Although the start of the school year in September was marked by a significant drop in the cost of money, hopes for a real improvement were quickly confronted with a very tense geopolitical context, as well as with uncertainties in France linked to political instability and the absence of a budget,” says Nicolas Verdillon. “In addition, there is a deteriorated pan-European economic environment that is likely to further affect the appreciation of the underlying real estate markets in 2025. In this context, I&L and residential will attract the attention of equity. Also, the prospects for real recovery are legitimately postponed to 2026. On the other hand, it seems to be a good time to start positioning yourself on the market when you have capital.”

“For 2025, the market could see a growth in investment volumes, or at least a maintenance of 2024 levels”, summarizes Stephan von Barczy. “However, the evolution of the market will depend heavily on the macroeconomic and political context. The stability of French financial indicators should positively influence valuations, although the general compression of rates is expected to be slower.”

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Hotel Le Yaca Saint-Tropez - 1 boulevard d'Aumale - 1 boulevard d'Aumale - 3990 Saint-Tropez Buyer: Rodolphe Saade (CMA CMG) Seller: private (Huret family) n.c. + than 30 rooms 50 M€