Foreign funds are fighting over apartment buildings in Greater Paris

Investment funds are starting to take a keen interest in residential real estate at a time when offices, shops and hotels, their hitherto favorite targets, are losing their financial interest. Teleworking is slowing down the demand for offices, which fell by 30% in 2020, online commerce is emptying shops, urban tourism is at a standstill … There are then warehouses, logistics premises, healthcare real estate ( accommodation establishments for dependent elderly people, for example) and housing.

At the end of July, the world number one in investment funds, BlackRock, announced the purchase of a building under construction of thirty-nine luxury family apartments in Clichy (Hauts-de-Seine), for rent “At market price”, in other words at a high price. This acquisition of 20 million euros – a pinhead compared to the 27.3 billion euros of assets that the company manages in France – reflects this recent interest.

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According to the Immostat database, these institutional investors (called “goofs”) acquired, in 2020, € 5.5 billion in residential assets, including student or senior residences, i.e. 40% more than in 2019.

“French institutions, insurers, pension funds and real estate funds had shed their apartments in the early 2000s, remembers Stéphane Imowicz, founder and director of Ikory, a consulting company specializing in residential real estate, and they are all going the other way today. This brings a lot of capital when there are very few offers of entire buildings, so much so that block sales are done at almost the same price, within 10%, as retail sales apartment by apartment. “

Purchase by entire buildings

Gecina (formerly Simco), for example, owned 17,400 apartments in 215 buildings in 2007, but today only has 5,500, not counting 3,500 rooms for students. Meka Brunel, boss of this land company, has, in 2020, said to want “Return to the residential” and acquire 4,000 housing units in four years from the developer Nexity.

The Americans Invesco and Hines, AEW – which launched, in France, in 2017, its Residys fund, endowed with 600 million euros -, the Swedish Akelius or the Canadian Ivanhoé Cambridge (real estate subsidiary of the Caisse des Dépôts du Québec) are also flocking to housing, a sector that all have considered, until now, too unprofitable and hampered, in France in particular, by cumbersome protection of tenants threatening their profits …

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