COLLIERS UFG PM - INVESTMENT MARKET FOCUS

For the French commercial property investment market late 2009 and early 2010 were note-worthy for the numerous acquisitions that symbolised the reinvigorated appetite of investors. The market returned at least partially to a level of liquidity that had evaporated during the win-ter of 2008-2009.

This trend, which is considered sustainable, is reinforced by a number of very clear signs: the rises in total investment volume and the unit size of transactions; pressure on the price of assets with the most secure income streams; and the positive attitude of a growing number of inves-tors, all of which indicate the beginning of a new investment cycle.

Nevertheless, if during the previous cycle the post-crisis market was driven by opportunistic investors looking for distressed sellers and discounted assets, the 2010 post-crisis market has been led by investors in search of steady income and protection against inflation. All asset classes taken into account, the overall investment universe is more uncertain than ever before, yet the traditional attraction of property – its durability – is in great demand. In this new kind of cycle, risk aversion – whether technical, geographical or an aversion to ten-ancy risk – seems to be the key factor influencing the strategy of most market participants.

Con-sequently, the prime asset segment has regained liquidity, while the bulk of the market remains difficult to measure and is often undervalued by the few investors that take an interest in it. Yet it is precisely in this part of the market that the pools of value creation and the highest rental yields (i.e., that measure the asset manager’s performance) can be found. As in all markets, extremely risk-averse investors will ignore the best opportunities in the property market, clear-ing the way for investors with the skills to value them correctly.

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source : Colliers UFG PM