"Beds & sheds. This is the leitmotif of real estate investors worldwide. In France, this is reflected in solid investment activity in logistics and hotels, two asset classes that are surviving in the midst of the slump.
On the other hand, there is one bed that is not living up to its potential: the residential sector. Whether classic or managed. The latest statistics show that the volume of commitments fell by almost 40% over the 1st quarter, even though the market remains starved.
The future should be a little brighter with a more substantial pipeline, thanks in particular to the sale of 5,000 to 6,000 housing units by Caisse des Dépôts. The terms of these sales will be an important marker of whether residential property can finally become an asset class worthy of the appetite of institutional investors.
For the latter, in the absence of private investors disgusted by punitive taxation, would have a card to play. The housing market is as deep as it gets. Demand is so high that vacancy is virtually impossible if we concentrate on the more densely populated areas. The predictability of cash flows is matched by low volatility of values.
The problem is that, in France, housing is still a horrible asset class, providing too low a return when it does exist.
In search of performance, investors are playing the managed card. Yesterday, it was senior residences. Today, it's student residences. Tomorrow, it may be coliving, despite the vociferations heard here and there from a few elected officials in search of public notoriety.
But, whatever happens, volumes will remain low. Too low to deploy massive amounts of capital that would benefit everyone. Investors looking for sustainable returns. To the too many households looking for a place to live, who find it hard to find suitable accommodation. And to the State, which receives its tithe at every stage of the transaction.
In an article published a few days ago, Méka Brunel, President of the Palladio Foundation, proposes the creation of a savings product dedicated to real estate in general, and housing in particular. Taking 1% of the €2,500 billion in savings freely invested by the French would trigger "a strong dynamic capable of creating real momentum and long-term value for all city stakeholders". Starting with their residents.
If only we could free up these savings instead of burdening them, we'd kill two birds with one stone.