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PARIS-French commercial investment rose by 90% in the second quarter against the first, says international real estate adviser Savills. Its latest bulletin recorded €1.43 billion deals, bringing total volume in first half to €2.2 billion, although this remains 71% lower than the €8 billion of business done in 1H ’08.

“The French investment market is showing positive signs of growth and we have seen some easing of upward pressure on yields,” commented Herve Blanchet of Savills Paris office. “The lettings market continues to experience a decline in demand and an increase in availability. Consequently overall recovery may be slow.”

French lettings saw take up of industrial warehouse space at 350,000 square meters in the second quarter, resulting in a mid–year take up of nearly 700,000 square meters, a 41% fall over the first half last year. Office also reported an annual regression of 7% over 1H08, though supply also increased in both segments in the first half. Immediate supply reached 3.2 million square meters in office, a 25% increase, and 41% to 2.7 million square meters in industrial.

Paris CBD saw a 25% decline in prime office rents to €606 square meters at mid year, compared to 12 months ago. Savills reported that rents have remained relatively stable in retail and industrial property, just as rents for prime retail parks and prime shopping centres. European Research head Lydia Brissy commented: “In April, retail sales rose by 0.9% and in June shopping center activity, as measured by footfall, was up 1.9%. However, the investment activity is restrained by the lack of suitable products available.”

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