French retail property latest hot spot for global real estate investors, as deal volumes expected to jump an estimated €2B in 2011

Michelle Rivera

LOS ANGELES , June 7, 2011 (Industry Intelligence) – Global real estate investors are turning to French retail property and steering away from ever-increasing and overly populated markets in the U.K. and Germany this year, as deal volumes are expected to jump an estimated €2 billion this year, Reuters reported.

According to a report from property consultant DTZ, investment volumes should increase 33% to €16 billion in 2011 from an estimated €12 billion last year, with retail comprising 40%.

Tom Newton, director at Eurocommercial Properties in charge of the company's French portfolio, said, "The investment market in France is extraordinary strong at the moment.”

Investors targeting retail property in France say a big part of the attraction is improving consumer confidence and economy, robust disposable incomes and a proven track record regarding ROI.

Lydia Brissy, head of research at Savills France, said investments will “continue to increase as this sector is seen as increasingly transparent, with attractive yields compared with other asset types,” Reuters reported, adding that yields on retail assets in France were between 5% and 6% compared with 4.5% for blue-chip offices, Reuters reported.

The primary source of this article is Reuters, London, England, on June 7, 2011.

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