During the first half of the year, €8bn was transacted in the French investment market during the first half of the year. One of the highest levels recorded since H1 2008 although 30% down compared to last year, which was an exceptional first semester with two mega deals above €1bn closed. So far this year no deal exceeding €500m has been signed yet. The market has been driven by deals ranging between €100m and €500m, accounting for 68% of the total investment volume.

Portfolios remain a real opportunity to invest large amount of capital. Portfolios sales accounted for 17% of the total investment volume, slightly less that in H1 2014 (24%) but the major trend is that since the beginning of the year, international investors, notably US funds are taking the lead on portfolio deals. The market is increasingly focused on offices, which totalled 69% of total investments in H1 2015 against 53% at the same period last year. The share of retail and alternative assets decreased slightly and stand at 14% and 9% respectively.

Domestic investors remain predominant on their market however cross-border investments rose from 37% in H1 2014 to 42% in H1 2015. US investors are still the most active. They totalled 17% of the total investment volume, targeting different type of assets. Since the beginning of the year, they have bought SEB offices portfolio for €1.1bn (€ 249m for the French part), the Goodman industrial portfolio for €170m, and the Queen Night club on the Champs Elysées for €70m. German funds traditionally focusing on office assets have been less active. They accounted for 7% of all investment. Sovereign Wealth Funds from the Middle East made a comeback in the French market; they accounted for 6% of the investment volume. They notably acquired Ecowest office tour, localised in The Western Crescent, for €477m.

The prime office CBD yield moved in by 25bps in the past twelve months. It remained stable over the last quarter, at 3.75%.

^{Source: Savills European Research}

Savills anticipates an investment volume above €24bn for 2015, in line with 2014. Several international portfolios are currently been negotiated and should be closed next quarter. These include the retail portfolio Celcius for which funds CIC Chinese and AEW Europe bid €1.3bn and an office portfolio for which Gecina and Ivanohe partnered to bid for €1.2bn.

^{Source: Savills European Research} 

Due to strong investor appetite for offices we expect the prime office CBD yield to further harden by 50bps by the end of the year.

The main uncertainties hanging over the future of the market is the future development of the American and Chinese economies and the risk of a Grexit that would affect the European financial market.