Despite the Obstacles, Avison Young Still Thinks Big for France

When told of market rumours suggesting potential difficulties for Avison Young France, President Thomas Canvel is not surprised. But he assured Business Immo that, having made its financial situation more stable internationally, his group is ready to move up a gear in France.

Like many of its competitors, whose earnings are intrinsically linked to the dynamism of the real estate markets, Avison Young has not been spared by the rise in interest rates and the resulting real estate crisis. In February, Standard & Poor’s Global Ratings downgraded the company’s credit rating after it defaulted on a $400 million debt repayment.

During Mipim 2024, the Canadian broker announced that it had reached agreement with its creditors on a deal. Its lenders have agreed to reduce its debt — estimated at around €480m million by more than 50% and to lower its interest rate in exchange for an equity stake in the company. "The key thing here is that by acknowledging and starting early on this, we’re done," CEO Mark Rose told CoStar News at the time. He added: "There are no more reductions in force. There’s no cost cutting. That’s done."

"Beyond that, they’ve also renegotiated a liquidity pocket to continue development in Europe," says Thomas Canvel, President of Avison Young France. "And more particularly in two countries, France and Germany."

For Avison Young France, this new capital comes at just the right time, according to Canvel, as the group is "reaching maturity compared to its first stage" after having assembled a team of 25 employees divided equally between its capital markets and project management teams.

"We have developed rapidly, although the first year of 2023 necessarily more sluggish, as we nevertheless worked on all types of smaller subjects to establish our track record," he says. "Since 2024, however, we have become self-sufficient, as we have reached the break-even point and should even be profitable by the end of the year."

Canvel notes that the pipeline of mandates entrusted to his Capital Markets team for 2024 stands at €400 million – mandates in progress obtained from"‘very big names such as Axa IM, CNP Assurances, La Française REM, Primonial and Perial", he adds – and assures us that "unlike some competitors currently in difficulty, Avison Young is part of a strong growth dynamic in France".

To achieve this growth, the Canvel has put the development of a tenant representation department at the top of his roadmap. A headhunter has been commissioned to put together a team of five to 10 people, to be operational by January 2025. Canvel explains: "We plan to offer consulting services to help users define their real estate needs and find their future premises. This new service will enable us to deal with the value chain in a much more continuous way, positioning us as a bridge between our project management and capital market activities."

But the company has not forgotten its first love. Following the departure of Guillaume Atten for Newmark, the broker intends to strengthen its capital markets team. "In the coming year, we should be recruiting several more people, including a director of capital markets," says Thomas Canvel. He adds that "Project Management is continuing to build on its excellent momentum, as we work with tech giants such as Ledger, the French unicorn [start-up] that we are supporting in the construction of their Paris headquarters on rue du Temple". To capitalise on this momentum, the department is set to double in size over the coming year.

Canvel expects his entity to grow to around 50 employees. The group is due to start looking for new premises shortly, and should therefore be leaving its Morning Monceau offices. And this is just the beginning, as the company is also preparing to develop an office rental agency, and should be commissioning a headhunter in the coming weeks to develop a team of around 25 employees. "In three to five years’ time, Avison Young should have between 150 and 200 employees in France," adds Canvel.

This growth will not, however, come from the retail sector, as shown by the departure of Managing Director Alexandre Boucly, who was in charge of this sector for both investment and rental deals. "Our retail business suffered a major setback and, post-refinancing, was not identified by our parent company as a strategic priority," says Canvel.

The company therefore intends to focus on office and residential property. "We are now a leading player in the Paris residential investment market, with €300 million in mandates for 2024," Canvel points out, but it is also open to working more on healthcare real estate.

Now alone at the helm, Canvel intends to drive the growth of his structure by maintaining the importance of building on synergies within his teams. "Our initial strategy was to be highly agile, which is all the more important when you’re a challenger, and to go where the market is," he says. "Part of our success today lies in our decision not to set up silos between the different asset classes within our teams, in order to benefit from cross-fertilisation of expertise."