Tag Archives: paris
Paris office market see strong year despite poor economic conditions
Despite the difficult economic background in France, the Paris office market has turned in a strong performance over the first nine months of this year, according to a new report from Knight Frank. Office take up increased by 13.2% and investment volumes rebounding by 39% compared to the same period in 2013, the report shows. Occupier take-up reached 1.4 million square meters in the first nine months of 2014 and is expected to reach two million square meters for this year as a whole. The increase has been driven by a number of significant deals over 5,000 square meters to major corporates such as KPMG and L’Oreal. The overall office vacancy rate has stabilised and stood at 7.2% at the end of the third quarter, although there is a disparity between the city’s different submarkets. Vacancy rates in La Défense and Western Crescent are at 11%, while in the CBD the vacancy rate is less than 6%. The report suggests that the office investment market remains buoyant and somewhat decoupled from the leasing market, with the current strong interest in trophy assets expected to continue. Transaction volumes for 2014 look set to reach their highest since the peak of 2007, having surpassed €11 billion in the first nine months. With a strong final quarter in prospect, deal volumes for 2014 as a whole are expected to end up in the region of €15 billion. International investors remain very active in the market and are showing interest in higher-yielding assets outside the core, as well as prime opportunities. ‘The Paris office market has bucked the wider economic backdrop and, while the economic outlook remains somewhat uncertain, the recently released positive GDP figures for quarter three will provide a boost for both occupiers and investors as we move towards the year end,’ said Darren Yates, head of global capital markets research, Knight Frank. According to Luke Condon, partner, Knight Frank Paris, the size and on-going resilience and stability of the Paris occupier market provides comfort to investors, as demonstrated by the increasing proportion of international capital attracted to the market. ‘This, coupled with improved financing conditions, has also led to significantly improved demand for non-core products. Market sentiment is positive but more product is required to satisfy demand,’ he added. Continue reading
UK house prices still rising but could be affected by Scot vote and 2015 election
House prices continues to rise across the UK in August but the vote in Scotland on independence is likely to have an effect along with next year’s general election. Both could act as a dampener on growth, according to latest UK residential market update report from Knight Frank. It also points out that there are some conflicting signals emanating from the market. ‘Economic confidence is up across the country and this, coupled with more positive employment data and ultra-low interest rates is providing a sound underpinning for increasing transactions and values in many parts of the country,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. She pointed out that the government’s Help to Buy scheme is also gaining momentum, with nearly 40,000 homes now purchased under the scheme. Around 85% of Help to Buy Equity Loans, the part of the scheme that allows buyers to purchase a new home even if they don’t have a 25% deposit, were taken out by first time buyers, signalling that the scheme is easing the bottleneck of pent-up demand. Yet there are some signs of headwinds in the market. ‘From a regulatory point of view, the new mortgage rules may be acting as a partial dampener on activity. While mortgage approvals for new house purchases remained steady in July after the dip seen after the MMR rules were introduced in April, they have not re-bounded to the pre-April highs,’ said Gilmore. ‘The data suggests that the rules, coupled with the new lending limits applied by the Bank of England, could be acting as a slight temporary brake on the market, especially for higher loan to income mortgages,’ she added. The report also points out that the Royal Institution of Chartered Surveyors reported that new buyer demand fell in August following a sustained period of month on month growth. ‘This could be due to the summer holidays, but it comes amid increasingly vocal hints of an interest rate rise from the Bank of England Governor. While the markets now anticipate a rate rise early next year, two members of the Bank’s rate setting committee voted for a rate rise in August, the first time this has happened since rates hit a record low,’ said Gilmore. ‘There is also a period of increasing political uncertainty looming. All eyes are on the Scottish Referendum this week. The debate over the result has already had an impact on equity markets as well as currency markets. If there is a yes vote, it is likely to be the uncertainty in the market as Scotland thrashes out its economic and fiscal policies ahead of 2016 that affect the Scottish housing market, rather than the fact that Scotland becomes independent,’ she explained. Continue reading
UK house prices up 11.7% year on year and national index reaches new record
UK house prices increased by 11.7% in the year to July 2014, up from 10.2% in the year to June 2014, according to the latest figures from the Office of National Statistics. House price annual inflation was 12% in England, 7.4% in Wales, 7.6% in Scotland and 4.5% in Northern Ireland. The index report says that overall house prices are increasing strongly across the UK, with prices in London again showing the highest growth. Annual house price increases in England were driven by an annual increase in London of 19.1% and to a lesser extent increases in the South East at 12.2% and the East at 10.6%. Excluding London and the South East, UK house prices increased by 7.9% in the 12 months to July 2014 and on a seasonally adjusted basis, average house prices increased by 1.6% between June and July 2014. In July 2014, prices paid by first time buyers were 13.5% higher on average than in July 2013. For owner occupiers prices increased by 10.9% for the same period. The mix adjusted house price index reached a record level of 206.6, some 2.7% higher than June 2014 when it reached 201.2, and 11.4% higher than the pre financial crisis peak of 185.5 in January 2008. David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that while what’s happening in London may be eye-catching, it is like looking through a kaleidoscope and skews any view of the current total housing landscape. ‘Peeling back the regional layers gives a much more informed view of the core reality of the current market. According to our own research, house price growth slowed across all regions except for London, the South East and East Anglia in July. While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth,’ he explained. ‘Most recently we’re seeing asking prices in the capital start to be reined in, which will apply the brakes on annual house price inflation as the market steadies. With evidence of London starting to cool off after strong growth earlier in the year, it is critical that the underlying momentum that has stimulated much needed increased volume in the rest of the market is allowed freedom to keep moving, whilst any price rises are kept steady and under control,’ said Newnes. ‘Further afield, it is critical that support mechanisms like Help to Buy aren’t dismantled. Compared to the nadir of 2008/2012, activity in the housing market has improved, but is not completely out of the woods yet, and still needs to recapture some of the vitality of its pre-recession health,’ he concluded. Peter Rollings, chief executive officer of Marsh & Parsons, believes that the market is returning to business as usual. 'UK house price growth is persevering with its upward climb, but the stride is steadying with prices rising an orderly 1.6% in the month to July 2014. However, London remains the snag in the… Continue reading
