AMB Property Leases in Paris Development

Global owner, operator and developer of industrial real estate, AMB Property Corporation, leased approximately 65,000 square feet in AMB Port of Rouen, a development in its Paris market, which is now fully leased.

Lincoln Electric, a manufacturer of welding equipment, is taking the last available space in the 275,000 square-foot project a month before completion of development.

The Port of Rouen provides rapid access to major economic centers in the region via highway, rail and the two major airports at Roissy and Orly.

Fonciere des Regions Says Property Values Fell 5% in First Half

July 3 (Bloomberg) -- Fonciere des Regions SA, the French office landlord with stakes in five other real estate investment trusts, will report a drop of about 5 percent in property values for the first half, according to its chief executive officer.

The estimate, based on preliminary property valuations, compares with the 10.2 billion-euro ($14 billion) value of FDR’s properties at the end of 2008, following a 3.1 percent decline for the whole of that year.

“It shows how well our portfolio has held up,” said Christophe Kullmann, 43, in a July 1 interview at his office near the Arc de Triomphe in Paris. “We have long leases, low market rents and high capitalization rates, plus we have few prime assets in central business districts -- the assets which are suffering the most.”

France: Real estate prices will drop 30 to 40% in the next 4 to 5 years

The reversal has already begun… but it cannot be seen yet in the price indices. Since September, the market has clearly begun tougher, and we can observe a volume collapse, i.e. a diminution of the turnover figures. Especially in the second-hand market.

Today, only high-quality products (well located, high floor, without a need for alterations) sell easily, at price levels that continue to increase. So that one may have the wrong perception that the market is OK. One needs to see that the mean selling delay has reached 8 weeks, to be compared to 4 weeks in 2004. During the previous depression, 15 years ago, the price drop became apparent only in mid-1991, although the transaction figures were falling since the spring of 1990. The present reversal seems anavoidable. First, because the interest rates are going to increase, even by a small amount. And also because the buyers cannot afford a further mortgage duration increase.

‘It’s a little paradise’

A villa in Bordighera, Italy

As you travel along the Mediterranean coast from France to Italy the French Riviera becomes the Riviera dei Fiori, or “coast of flowers”. You leave behind Menton, with its famous microclimate, and arrive in the Ligurian border town of Ventimiglia in the province of Imperia. Hillsides that in France are covered in concrete are choc-a-bloc full of greenhouses here. Further west is San Remo, the city that each year sends blooms to Vienna’s Musikverein hall as decoration for its famed New Year’s Day concert.