Jean-François Mounic, Managing Director of EOL the founding firm of IRELS, shares his view of the logistics and industrial property market in France.

EOL is a leading corporate real estate consultancy in france

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The post-Covid period and the years from 2020 to 2022 were flourishing years for the French industrial and logistics property market, with high levels of take-up and particularly attractive yields for investors. The economic and geopolitical context then severely impacted the market. The market has been slowing since the end of 2022. In 2023, 3.2 million sq. m were allocated for 133 transactions, with a marked slowdown in the second half of the year (3.8 million sq. m had been allocated in 2021). E-commerce has boosted demand for space in France, as has demand from express delivery companies in connection with the strong growth in the volume of packages delivered. The type of user has also changed over time, the 3PLs still drive the market, but demand from SMEs and industrial companies is increasing. The French market is also reshaping itself geographically. Historically, the backbone (Lille, Paris, Marseille, Lyon) has always concentrated most transactions, but we are now observing new markets with significant potential, on the Atlantic arc for example (Toulouse, Bordeaux, Nantes, Rennes, then Normandy).
However, the economic, financial, technical, and regulatory constraints are becoming increasingly rigorous. The lack of available land in France is a cause of concern, even though a few measures are being taken to alleviate this problem, such as the redevelopment of derelict land and measures taken by the public authorities. Demand from users remains strong, as does the desire of promoters to develop projects, but each operation takes more time to complete. The stabilisation of financing rates, the fall in construction costs, and the cut in key interest rates observed at the end of 2023 all point to a welcome revival in the industrial and logistics property market in France in the months ahead.
The downward trend in the market in the last half of 2023 continued in the first quarter of 2024, with 439,000 sq. m of take-up (- 60% VS. Q1 2023) and 14 transactions completed. The volume of supply is increasing and the trend towards vacating space has been confirmed across the country, with some geographical disparities. Rental values are tending to stabilise after rising sharply in recent years. 672 million has been invested in the French industrial and logistics market (of which 505 million for logistics). This volume is on the rise and exceeds the volume invested in offices, a historic first.
The prime rate was at 5% in Q1 2024. This lacklustre 1st quarter does not necessarily reflect future results, as a number of transactions are underway, and several major portfolios are due to be sold in the coming months.
EOL is a French consultancy that has specialised in industrial and logistics property for over 20 years. We specialise in three areas: transactions, investment advice and project management. We have an extensive track record and local expertise, with 10 offices in France covering the main markets. This enables us to provide targeted solutions for each of our customers. We are developing a human, technical and innovative approach. In 2016 we developed an engineering division, Systenza, which provides project management assistance for large-scale projects, including decarbonisation of buildings, and in 2017 we launched the IRELS network. IRELS is Europe's first network of independent firms specialising in logistics real estate. At EOL we are committed to putting people at the heart of our business, and we have maintained a family spirit throughout our development. EOL is now one of France's leading consultancies in the logistics, business and retail segments and we hope to develop our activities in Europe.

Jean-François Mounic
Managing Director, EOL
If you would like more information about the French market or the IRELS network, please do not hesitate to contact us.
To find out more, visit
https://eol.fr
https://www.irels.net/

EOL studies 10,000 sqm buildings under the ICPE regime