Italy among top picks for French real estate investors

Italy is one the most preferred investments destinations for French investors, who increased their positions in logistics and residential across Europe last year in search of higher yields.

According to a report from Savills, Germany remained the preferred destination in Europe for outbound French investments drawing 2.9 billion euros last year, followed by Italy at 2.2 billion euros and the UK at 2 billion euros, an increase of 71 percent on 2019 and 95 percent above the five-year average for the latter.

The most active French investor globally by far is AXA, while in EMEA top investors also include Covivio, BNP Paribas, Primonial, Caisse des Depots and Amundi.

French cross border investment into the residential sector totalled 3.9 billion euros last year, a record high and 206 percent above 2019 levels.

French appetite for cross border industrial properties also surged.

The global volume French investors dedicated to logistics assets increased by 141 percent year-on-year to 1.8 billion euros last year, mainly targeting the US, Japan, Italy, Germany, the Netherlands and the UK, according to Savills.

“French investors have increased their investment into the office sector in other countries recently and have been investing into the so-called alternative sectors for many years, both in France and cross border,” said Tristam Larder, Joint Head of Savills Regional Investment Advisory EMEA.

“With many institutional investors overexposed in France and prime yields for Paris CBD offices standing at 2.75%, a record low, we anticipate the high levels of outbound capital to continue this year,” he added.

French investors are seen continuing to widen their scope globally in 2021.

“The amount of money to be invested, the lack of suitable products on home soil, the hunt for competitive pricing and the need to diversify their portfolio will increasingly lead them to look beyond France,” says Lydia Brissy, Director European Research at Savills.

In the Asia-Pacific region, French investors allocated some 2.4 billion euros last year, representing 17 percent of all French cross border investments, a record high both in terms of volume and share.

The different paces of economic recovery from the pandemic have highlighted some regional opportunities with Asia-Pacific forecasted to lead the cycle, hence offering faster growth prospects than other regions.