France was a popular destination in 2019 for real estate capital, both equity and debt. On the equity side, data provider Real Capital Analytics reported a record performance, with investment reaching €42 billion.
Paris was the target of most of that money. RCA data show the French capital overtook London to be 2019’s largest metropolitan market in Europe by value of deals, with €28.4 million of investment, up 9 percent. “Parisian offices became Europe’s largest single property investment sector last year, with 50 percent of the capital coming from overseas, and South Korean investors alone spending €4 billion on these assets,” said RCA’s senior director of EMEA analytics, Tom Leahy.
France’s major banks had a significant presence in the real estate sector, both within their home country and the wider European market. Corporate and investment banking group Natixis was voted our Bank Lender of the Year: France. In November, it predicted 14 percent growth in real estate lending to €8.5 billion for 2019, of which €5.1 billion related to its home country. Natixis provided €507.2 million to finance asset management company Swiss Life Asset Managers’ acquisition of a €1.7 billion Paris office portfolio. It also co-arranged a €560 million loan for residential landlord Powerhouse Habitat to refinance a portfolio of homes across France.
However, a US bank was behind the transaction voted Financing Deal of the Year: France. In May, Bank of America Merrill Lynch arranged the Taurus 2019-1 FR DAC commercial mortgage-backed securities transaction. This securitised a November 2018 senior loan of €249.6 million and a €53.3 million mezzanine facility to US investor Colony Capital for the acquisition of 206 mainly office assets in a sale-and-leaseback with energy company EDF Group. It was the first completely French CMBS since 2006 and demonstrated increased capital markets investor demand for exposure to the country’s real estate.
In the non-bank lending space, London-based debt specialist Cheyne Capital was voted Alternative Lender of the Year: France. The credit investor has expanded its French origination team in the past two years and was active across several deals in the country in 2019, including a €77.6 million loan to developer GDG Group for an office development, H2B in Clichy, Paris, in September.
In the advisory space, First Growth Real Estate, which has an office in the French capital, was voted Debt Advisor of the Year: France.
The independent advisor sourced a circa €200 million senior and capex loan for the acquisition of the Tour W office building, located in La Défense in Paris, from a French bank. In the leisure sector, it sourced €80 million of senior debt to refinance and provide capex for two four-star hotels near Paris.
It also arranged debt for a serviced-office portfolio and high-end hotels in the French Alps and French Riviera.