Summary of our market study

Since 2020, the global real estate development market has experienced a dynamic trajectory, with particular growth in certain segments and regions. Despite an initial 8% decline in the French market between 2019 and 2020, a rebound is seen, with sales in 2021 exceeding those of 2019, and data from early 2023 indicating continued growth above 2022 figures. The market reflects strong demand for residential property, as evidenced by an 18% increase in authorized construction and a 10.7% rise in housing starts in 2021 compared with 2020. However, a slowdown in housing starts is observed in 2022 due to economic difficulties.

Non-residential demand, after a period of reduction although specific segments such as public premises experience declines at the end of 2022. In particular, demand for warehouses has surged, increasing by 121% between the first half of 2014 and the first half of 2022, driven by the expansion of e-commerce.

Difficult economic conditions since 2022, exacerbated by inflation and rising interest rates, have led to a contraction in household investment and stagnation in household spending. Despite these challenges, the real estate market remains robust in certain regions, and continues to adapt to changing demand and economic fluctuations.

Demand dynamics in the French property development market

Looking at the French property development market, it's clear that the sector is undergoing various changes and trends influenced by multiple factors. Demand for housing, a critical segment of the market, has seen a decline in the number of housing starts, falling by around 6%. However, the start of 2023 is showing improvement, with growth of over 8% compared to the same period last year. Interestingly, the market has seen a significant shift in the type of homes being built. The number of single-family homes has dropped considerably, falling between 20,000 and 25,000 in the space of a decade. At the same time, residential units grew substantially, with housing starts rising from 20,000 to around 30,000. This indicates that buyers' preferences are turning more towards multi-family housing options. Demand for non-residential property also underwent a transformation, followed by a growth spurt of over 15%.

By 2022, some 40 million square meters of non-residential space will come on stream, with commercial and transportation space seeing the most notable increases. The warehousing segment has received particular attention, with a dramatic increase from around 950,000 square meters in the first half of 2014 to 2.1 million square meters in the first half of 2022. This increase, which represents an expansion of more than 100% in seven years, is mainly due to the rise of e-commerce, which requires ever-larger warehousing spaces to support its growth and rapid delivery models.

Against the backdrop of this demand, the socio-economic status of French households has destabilized somewhat since 2022. Household investment has contracted slightly and spending has stagnated, despite overall growth of aroundof around 3.5% in the first three quarters of the same year compared with the previous year. This is attributed to an inflation rate that soared to around 6%. In addition, the household confidence index fell from an average of 100 to around 80. This index reflects general sentiment towards the economic climate, indicating a decline in public optimism. In a similar vein, demand for home loans is also down, from around €22 billion to around €20 billion.

Profiles of leading real estate developers

The real estate development market landscape boasts a range of influential players, each bringing their unique expertise and vision to the growth and evolution of the industry. These entities range from construction giants to property development specialists to those from the banking sector. Here's a closer look at these key market players.

Construction giants with a head start in development

  • Eiffage and Bouygues Immobilier are major players in the construction sector, known for their involvement in a wide range of projects, including single-family homes, elaborate apartment complexes and state-of-the-art office space. They bring solid engineering and construction know-how to real estate development, guaranteeing a blend of sustainability and innovation.
  • Vinci Immobilier is another major player, with an impressive repertoire that includes residential, commercial and office developments. Its global approach enables it to harmonize urban planning, architecture and environmental concerns, creating spaces that are not only functional but also sustainable.

Specialists in real estate development

  • Nexity is a cornerstone of the property development market, thanks to its expertise in residential, commercial and office property development. Its influence extends to the creation of dynamic neighborhoods, pioneering the development of intelligent, connected living spaces that respond to contemporary lifestyles.
  • Altarea Cogedim has made substantial contributions to the market, particularly in the retail and office segments. It strives for excellence in creating multi-faceted environments where commerce, work and leisure seamlessly intertwine.
  • Icade and Pichet Group demonstrate their prowess not only in the development of housing and offices, but also in the creation of commercial spaces that serve as socio-economic hubs. Their commitment to innovation guides the transformation of urban landscapes and fosters community-focused developments.
  • Kaufman & Broad and Bassac are renowned for their versatile contributions to various market segments, including single-family homes, apartment buildings and offices. Their commitment to responsive design and sustainability principles make them dynamic entities in the market.
  • Nacarat aligns its strategy with the evolving demands of the residential and commercial sectors, encouraging urban renewal and diversified architectural projects that prioritize user experience and aesthetic appeal.
  • AST Groupe is particularly appreciated for its clear focus on the production of single-family homes and apartment buildings, demonstrating a deep understanding of residential needs and a dedication to creating personalized living spaces.
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Summary and extracts

1 Market overview

1.1 Presentation and definition of the real estate development market

Real estate development involves the design and construction of residential and non-residential properties for sale to buyers who will then rent them out or use them directly. It is to be distinguished from land development, which develops vacant land. Real estate development encompasses all the means and actions involved in acquiring a plot of land, erecting a building and then having it purchased by a customer.

The property development market can be segmented into :

  • Residential property (apartment buildings, single-family homes, etc.)
  • Commercial property (offices, restaurants, shops, warehouses, factories, hotels, etc.)
  • Leisure and/or public goods (gymnasiums, swimming pools, stadiums, hospitals, town halls, etc.)

This market is obviously correlated with the global real estate market, and the resulting trends directly affect the activities of real estate developers. On a global scale, this market is growing strongly, with a CAGR (compound annual growth rate) of 8.4% between 2013 and 2021, and is focused on certain regions or cities where transactions are significant: the United States, Europe, and increasingly Asia. [MSCI]

Despite an 8% drop in the French market between 2019 and 2020, it is on a growth trajectory: sales for 2021 exceed 2019 figures, and data for the start of 2023 still surpasses 2022 growth.

The majority of sales (by volume) by developers are for home-ownership or investment purposes. However, it is dependent on a number of factors, including demand from the private and public sectors, the level of public subsidies, lending rates and, in the case of private home purchases, the financial situation of households. Recently, the warehousing segment has been booming, while demand for office construction is showing lower rates. [Fédération Française de la Promotion Immobilière]

1.2 The global market

Global professional real estate investment market World, ****-****, in trillions of dollars Source: ****

The real estate market, which includes property development, according to MSCI, will be worth US$**,*** billion in ****, driven mainly by the USA (***), Japan, the UK, China, Germany, France, Hong Kong and Canada.

Top ten real estate markets by ...

1.3 A growing French market dominated by housing sales

According to INSEE, the real estate development market in France will be worth €**.** billion in ****. With the exception of ****, the market has been in a period of steady growth since ****, with a growth rate of over **% between **** and **** and + *.*% over the period **** to ****. Moreover, forecasts for the beginning of **** look positive, ...

1.4 The impact of Covid-19 on the real estate development sector

Building sector figures for **** reveal the impact of the health crisis. In new construction, there was a **% drop in residential construction, and a drop of over **% in non-residential construction. The granting of building permits is also down by almost **% on ****.

There are many causes for this: obviously, there's the slowdown in ...

2 Demand analysis

2.1 A market dependent on many factors

According to Les Echos, the main wishes of residential buyers are to live in an individual home, with more space, close to shops, transport, places to live and work, to be able to respect their budgetary constraints, to acquire an energy-efficient home, and to have access to support services for their ...

2.2 Booming demand for warehouses

The graph below shows the evolution of demand for warehouse space in France for each half-year between **** and ****. There are considerable fluctuations over the period studied, with, for example, a decrease of almost **% between the *nd half of **** and the *st half of ****, or an increase of almost **% between the *st ...

2.3 A worsening household situation since 2022

The ease of home ownership is highly dependent on the economic health of French households. According to the Fédération des Promoteurs Immobiliers, several indicators point to an unstable situation from **** onwards.

First, there is household investment. After steady growth between Q* **** and Q* ****, we have seen a slight contraction ...

2.4 Real estate and home ownership for young people

Two surveys conducted by Harris Interactive for the Conseil supérieur du notariat in **** (***), shed light on the state of home ownership among millennials. [***]

**% of those surveyed are investing in property, or rather, buying a home as their main residence, between the ages of ** and **. And while the average age ...

2.5 Who are real estate buyers?

In ****,IFOP conducted a survey of *,*** people representative of the French population in order to draw up a profile of residential property buyers in France.

Three quarters of buyers are under **.

Age of property buyers France, ****, % of total Source: ****

With regard to the socio-professional category of buyers, contrary to all expectations, ...

3 Market structure

3.1 Real estate development value chain

The real estate developer is not an isolated player; on the contrary, the act of real estate development requires the involvement of numerous players upstream, during the project and downstream. The main ones are

The project owner, who defines the project specifications. In the construction industry, project owners can be private ...

3.2 Companies and their characteristics

For company and employee statistics, the following NAF codes are used:

**.**A: this code covers the development of buildings primarily for residential use, and the development of hotel residences **.**B: this code covers the development of office buildings **.**C: this code covers the development of all types of non-residential buildings ...

3.3 How a real estate development project works

The criteria for success are rapid marketing and, above all, ensuring that the end result is in line with budget forecasts. To achieve this, a real estate development operation always follows the same stages:

Launching the project after studying the opportunities Control of the land on which the project will be ...

3.4 Financing a real estate development project

Real estate development projects can take a long time to get off the ground, and the revenues generated usually don't arrive until quite late, so it's essential to find financing to bring these projects to fruition. There are * main sources of financing[***] :

Pre-sale of homes or buildings to companies accounts for ...

4 Offer analysis

4.1 Main contracts and services

A real estate developer is primarily concerned with individuals, investors and companies with a real estate project. Generally speaking, property developers offer property development services, as well as many other services related to their core business.

In terms of real estate development, they offer contracts for :

Vente en L'Etat Futur d'Achèvement ...

4.2 Disparities in housing prices

The average price per m² of housing in France will be €*,*** for an apartment and €*,*** for a house in ****. Over the period ****-****, prices per m² for apartments and houses have grown at an average annual rate of +*.**% and +*.**% respectively.

evolution of house and apartment prices per square meter France, ****-**** ...

4.3 The popularity of smart buildings

In ****, Smart Buildings will account for *** million euros, *% more than in ****. Projections show a **% increase in sales for smart buildings in **** compared with ****. [***]

The DRIEAT Ile de France defines the concept of smart buildings or intelligent buildings as "the integration of active and passive energy management solutions, aimed at optimizing consumption, ...

4.4 A dynamic market benefiting from innovation

According to the Crédit Foncier/CSA barometer, the level of optimism among healthcare professionals has fallen in recent years, from **% in **** to **% in **** . For ****, there are marked disparities : the morale of land developers, promoters and builders is down, while that of real estate agents is up **%.

Level of optimism among ...

5 Regulations

5.1 Regulatory framework

The real estate development business didn't emerge in France until the late ****s, which is when the legal framework began to take shape. Today, this activity is closely supervised, particularly for residential real estate, to guarantee the safety of future residents.

The main laws in France are

The law of January ...

6 Positioning the players

6.1 Segmentation

  • Bouygues Immobilier
  • Vinci Immobilier
  • Eiffage Groupe
  • Nacarat (Groupe Robot Dutilleul)
  • Nexity
  • Altarea Cogedim
  • Icade
  • Kaufman & Broad
  • Pichet groupe
  • Les Nouveaux Constructeurs Bassac
  • AST Groupe
  • Sogeprom
  • BNP Paribas Real Estate France
  • Marignan
  • Lazard Group Real Estate
  • Réalités Promotion
  • Sopic
  • Compagnie de Phalsbourg
  • Frey
  • Duval Groupe
  • Groupama Immobilier
  • Unibail-Rodamco-Westfield
  • Arche groupe Immobilier
  • Socri
  • CEETRUS Auchan
  • SCC
  • CDC Habitat
  • Constructa
  • Spirit Immobilier
  • Apsys
  • KS Groupe

List of charts presented in this market study

  • Europe's 10 most active markets
  • Global market for professional real estate investment
  • Top ten real estate markets by country
  • Breakdown of business volume in real estate development
  • Sales trends for the real estate development sector (NAF code "4110")
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Latest news

Real estate: Nexity's property managers become independent - 04/04/2024
  • - Sale of Nexity's services division to Bridgepoint: 440 million euros.
  • - Business areas included in the transaction: condominium management (60% of customers), rental management, transaction and insurance brokerage.
  • - Size of business sold: nearly 3,200 employees, over 200 branches, nearly one million customers.
  • - New company name after sale: Evoriel.
  • - Brands retained: Lamy, Oralia, Richardière, Lamy Assurances.
Real estate crisis: Nexity launches redundancy plan and freezes dividends - 29/02/2024
  • - Nexity, the French real estate market leader, has announced a redundancy plan.
  • - Nexity sales in 2023: 4.27 billion euros, down 9%
  • - Nexity has seen a 25% reduction in new-build reservations compared with the average for the last five years.
  • - Nexity currently has around 8,200 employees. Of these, around 3,100 are due to leave the Group in April, following the planned sale of the property administration business to Bridgepoint.
  • - Nexity's international sales are down.
  • Subsidiaries in Portugal and Poland have already been sold, and the company plans to leave Belgium, sell its platform in Italy and complete its projects in Germany.
Real estate: Icade to convert part of its offices - 19/02/2024
  • - In 2023, Icade booked almost 5,300 housing reservations, down 12.6% on 2022.
  • - Block sales to institutional investors and social landlords accounted for over 60% of the total, or around 3,600 lots.
  • - Icade was able to maintain its sales in property development at nearly 1.3 billion euros.
  • - Icade signed leases for 243,000 square meters of office and business space - for a total portfolio of 1.8 million m2, up 20% on 2022.
  • - Rental income amounted to 364 million euros (+2.2% on a like-for-like basis).
  • - The valuation of Icade's portfolio has been revised downwards by 17.5% compared with the end of 2022, to 6.5 billion - including 5.3 billion in offices.
  • - Icade plans to diversify further, targeting business premises, student residences and data centers as a priority.
  • - Icade has begun to withdraw from clinics and nursing homes, and has already recouped 1.45 billion euros
Vinci Immobilier, the first major property developer to launch a redundancy plan - 17/01/2024
  • Vinci Immobilier has set up a job protection plan and begun a voluntary redundancy scheme.
  • The French Federation of Property Developers (FPI) expects sales to be down by half in 2023 compared with 2022.
  • Housing starts were down 19.6% year-on-year at the end of November, with 294,700 units built.
  • In 2023, the number of business failures rose, with 122 developers going out of business, compared with 96 in 2022.
  • For homebuilders, 867 insolvencies were recorded in 2023, after 624 in 2022 and 579 in 2021.
Real estate: Nexity accelerates debt reduction by selling off its property management business - 22/12/2023
  • Value of Nexity assets sold to Bridgepoint: 440 million euros.
  • Nexity sales in 2022: 4.7 billion euros.
  • Number of lots managed by Nexity's property managers: over 800,000.
EDF : Eiffage to build Penly EPR reactors - 17/11/2023
  • Eiffage has signed a contract with EDF for civil engineering work on the EPR2 nuclear reactors in Penly, worth over 4 billion euros.
  • Preparatory work is scheduled to start in mid-2024, subject to obtaining the necessary administrative authorizations.
  • The two EPR2 reactors at Penly are the first pair of reactors that the French government plans to launch between now and 2035-37, as part of its program to revive the nuclear industry.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Bouygues Immobilier
Vinci Immobilier
Eiffage Groupe
Nacarat (Groupe Robot Dutilleul)
Altarea Cogedim
Kaufman & Broad
Pichet groupe
Les Nouveaux Constructeurs Bassac
AST Groupe

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