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La Française carried out €2.5bn euros worth of transactions in 2018, thanks to its European investment arm. The company shows no signs of stopping there.
Leaders League. How would you assess the real-estate market in 2019?
Marc Bertrand. Despite a number of geopolitical uncertainties, I believe the real-estate market will benefit from economic growth and low interest rates. We are at the top of a cycle, but the plateau will extend into 2019, just as it did in 2016, 2017 and 2018.
Which real-estate markets will continue to attract investors in 2019 and which will be less in demand?
Today, large urban centers have been able to construct a winning ecosystem encompassing quality of life, concentration of knowledge and economic dynamism. La Française aims to redirect its focus to these interconnected urban centers.
Paris is proof positive of this approach, and the Grand Paris project, which will continue to reinforce the attractiveness of the region for decades to come. Lyon, for its part, has hit the premier league of urban markets in Europe. Other cities in France are making the most of their advantages, such as Bordeaux, which benefits from a high level of dynamism; Nantes, with its forward thinking unban renewal projects and Lille which has leveraged its position at the crossroads of Europe. In contrast, Marseille remains a location of largely unexploited potential and Toulouse, after punching above its weight for decades has fallen back into the pack.
What are the current investment strategies of La Française REM?
We have traditionally been positioned on core / core + risk and have started to explore the value-added segment. As part of our core strategy, which involves practically all of our SCPI and a large proportion of the institutional investors which have placed their trust in us, we favor the most modern, recently built buildings, with a strong client-service element, which are in the center of cities with efficient transport networks.
To boost average returns, we prefer to invest in the center of dynamic mid-sized cities, rather than in the listless peripheries of large metropolitan areas. Concerning value-added, we are always on the look out for assets to buy or restructure in markets where the demand is high, notably Paris city center and the in future hubs of greater Paris, such as Saint Denis Pleyel. Of note, we launched a development fund partnership with Demathieu Bard in 2018 and we have just completed a joint venture with Canada Pension Plan Investment Board.
We are looking to increase the number of properties managed in 2019 and these include retirement homes and tourist accommodation, because these have a proven track record of delivering cash flow over the long term. When it comes to retail property, we will continue to make acquisitions without overinvesting. And as regards residential, we have an original approach: we have positioned ourselves as a finance provider as well as a traditional investor.
What is your strategy as regards Europe?
We acquire core / core+ assets and are still present in Germany, the Netherlands and Dublin. The United Kingdom is a case apart. We are waiting for the dust to settle on Brexit before investing again there, although that’s not to say we don’t believe the country will remain one of the best places in Europe to invest.