Contrasting RE Impacts of the UK and French Elections
GRI Club Europe
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GRI Awards Europe 2024 - Only ONE WEEK left to vote!
The excitement is building as the GRI Club’s inaugural GRI Awards Europe 2024 has reached voting stages! This prestigious celebration honours the most exceptional leaders and groundbreaking projects to recognise the achievements of those who are truly shaping the future of real estate in Europe.
?? When submissions closed on June 14th, the total number of projects submitted across the 15 categories reached an impressive 416, spanning 27 different countries. Next, GRI Club carefully evaluated the entries to select the 137 finalists who now face an online voting process to determine the top three projects in each category.
Voting will remain open until July 19th, before we announce the top three on 22nd July and open one final round of voting to define the overall winning entries in each category. The winners will then be announced at the GRI Awards Ceremony, taking place in Paris on September 10th, 2024.
1.5 million homes planned by new UK government to combat housing crisis
Real estate investors have welcomed the Labour Party's landslide victory in the UK election, with experts praising the new government’s proposals to address the housing crisis through public and private sector collaboration, the maintenance of stamp duty exemptions for first-time buyers, and the construction of 1.5 million homes while reforming the planning system.
?? Chancellor Rachel Reeves' "get Britain building" measures include comprehensive reforms to housing and infrastructure development, updating the National Planning Policy Framework, reinstating mandatory housing targets, and lifting the ban on onshore wind projects. There are also calls for reforms in business rates, pension investment in real estate, and the creation of a UK investment agency to attract private capital.
The relatively predictable and low-chaos election has led to minimal disruption in the real estate market, with property surveyors RICS noting steady residential activity and expectations for a short-term increase in home sales, driven by potential interest rate reductions.?
?? 世邦魏理仕 's 2024 mid-year UK outlook report predicts a rebound in the UK real estate market, with positive sentiment in debt markets and increased lending activity anticipated to drive investment. The office, logistics, retail, and residential sectors are all expected to see growth, with particular emphasis on sustainable developments and infrastructure improvements.
Despite this optimism, concerns persist about mortgage affordability, potential tax increases, insufficient rental market supply, high construction costs, skilled labour shortages, and possible changes in property taxes that could impact both domestic investors and international buyers.
The new government’s effectiveness over the next two months will be a key matter of consideration at Europe GRI 2024, where the biggest names in real estate will gather in Paris for two days of closed-door roundtable discussions on every facet of the industry, on September 10th-11th.
French RE investment levels at lowest since 2010 amid political deadlock
The French snap election, resulting in no party gaining an absolute majority, has led to potential political deadlock, eliciting mixed reactions from wealth managers. Many see a hung parliament as beneficial for European equities by preventing radical policy changes, but express concerns over France's fiscal health and debt levels.
?? The uncertainty has prompted some wealthy French residents to consider moving abroad to avoid potential tax increases proposed by leftist parties, affecting investment decisions, hiring, and venture capital fundraising as they seek stability in other countries.
Concerns may be validated by news that real estate investment levels are at their lowest since Q1 2010, and just EUR 4.1 billion was invested in French commercial real estate in the H1 2024, a 39% drop from the previous year, according to ImmoStat. The annual decline was less severe in Q2, at 29%, with industrial and logistics segment deals rising by 7%.?
?? However, improved market stability has led to some successful deals, particularly in Paris, despite challenges from hybrid working and fluctuating asset values. Prime yields fell slightly for offices but remained stable for logistics and retail sectors.
As well as dedicated sessions on France at Europe GRI 2024, industry leaders will reunite for the ‘GRI Heritage and Modernity” club meeting, hosted in partnership with Jones Lang LaSalle France at the French capital’s historic Bergère building on September 24th, to discuss solutions for combining the city’s unique architectural heritage with a modern and sustainable vision for the future.
“Pockets of growth are attracting foreign investors” - Arnaud Broussou
“Over the past ten years, growth has been driven by compression of cap rates, but that is no longer the case,” explained Arnaud Broussou , Chairman of Colliers Global Investors France during an exclusive interview at France GRI 2024. “Right now, we need to find new leverage to create value in real estate through very accurate asset management.”
?? Arnaud addressed investment strategies in French real estate, as well as the wider health of the French economy. Regarding outlooks shared among other investors during the discussions at the event, Arnaud revealed a variation in strategies, with investors focusing more on smaller deals, and sentiments showing a level of caution.
You can find more content from France GRI 2024, including an interview with Pierre Leocadio, Head of Office & Retail - Europe at Oxford Properties on YouTube, and our full report on the key takeaways from the discussions that took place at the event via the GRI Hub!
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