(Bloomberg) — Investments in Paris commercial real estate continued to decline in the first quarter, hitting the lowest level in 15 years.
Total deals for properties including offices, retail space and warehouses in the greater Paris area sank 64% from a year earlier to €885 million ($959 million), according to statistics provider Immostat, whose figures only include deals by investors who seek to earn rent income. This is the lowest quarterly level since the second quarter of 2009.
The combination of higher interest rates and the uncertain future of hybrid work has slowed commercial real estate dealmaking in Europe, ending a decade-long boom. Still, the prospect of rate cuts is reviving hopes in some areas of the market. In London, investors have recently pulled heavily discounted deals in a bet that prices will recover.
In the greater Paris area, the average cost of buying office space slumped 19% from a year earlier to €6,205 per square meter in the first quarter. This is the lowest price in almost seven years, and far below the peak of €8,340 per square meter achieved in 2021.
In France, total investment deals plunged 55% to €1.7 billion in the first quarter, according to Immostat.
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