Brainsre compiles below the weekly news highlights.
Office – La Défense: a brokerage giant seduced by Hekla at €530/m2/year
- The office rental market in La Défense is experiencing its largest lease transaction of the year, with Amundi Immobilier/Primonial REIM securing 9,600 square meters in the Hekla tower.
- The lease agreement is for nine years with a face rent of €530/m2/year and an additional €25/m2/year for catering services.
- Rather than reducing the rent, the landlords have offered significant rent-free periods, ranging from 35 to 40 months, which aligns with current practices in La Défense.
Retail – In Paris, Passy Plaza has been acquired by three SCPIs
- AEW, on behalf of three of its SCPIs, has acquired Passy Plaza, a retail center located on Paris’ rue de Passy in the 16th arrondissement.
- The property, which spans over 13,000 square meters and is leased to 25 tenants including Uniqlo and Zara Home, was purchased for approximately €130 million. It was previously acquired for €141 million by Eurocommercial ten years ago.
- AEW’s acquisition marks their seventh investment on rue de Passy and highlights the area’s vitality, as well as the high purchasing power and low retail vacancy rate (currently below 1%) in the neighborhood. AEW manages €6 billion of retail assets in France.
Residential – The impossible property crash
- Despite media speculation and concerns about a real estate crash, a complete collapse in the housing market is highly unlikely. While there may be occasional painful adjustments, a true housing crash is impossible.
- A crash refers to a sudden drop in asset prices, but the mechanics of the real estate market are different. Comparisons to stock market crashes, such as 1929 and 1987, do not apply to real estate. Past declines in housing prices in France have been relatively modest, making it hard to label them as crashes.
- While commentators sometimes draw comparisons to previous downturns in 2014 and 2009, the price decreases in the housing market during those periods were limited, with only slight declines over a few years. Even the larger drop in 2009 cannot be classified as a full-fledged crash.
Residential – New, tougher anti-squatting law passed by Parliament
- The French Senate has passed a law to tighten sanctions against squatters, despite opposition from the left and certain homelessness advocacy groups.
- The law, which also expedites procedures for unpaid rent cases, received 248 votes in favor and 91 against in the Senate. The Justice Minister, Eric Dupond-Moretti, defended the law as balanced, strengthening property owners’ rights without compromising the protection of bona fide occupants.
- The proposed law, initiated by Deputy Guillaume Kasbarian, triples the penalties for squatters, including up to 3 years of imprisonment and a €45,000 fine. The aim is to combat squatting, which is viewed as a violation of privacy and to protect property rights.
