French Investment Recovery Expected in 2010

PARIS-French property investment should recover slightly to around $14.8 billion in 2010 from the low point of $10.1 billion last year, according to a survey of institutional investors by Investment Property Databank and the Paris Ile-de-France regional development agency.

This would push investment up to near its 2008 level but leave it well below the boom year of 2007′s $36 billion. German funds, insurance companies and other European non-listed funds are expected to be the most active investors this year. Yields are forecast to decline, with prime yields on central Paris office space predicted to ease to 5.40% at end-2010 from 5.65% currently and 5.80% at the time of the previous survey in November. Logistics yields are seen easing to 7.60% from 7.80% currently, but retail yields are not expected to decline further from present levels of around 5.60%.