focus T
wo of the greatest cities in the world. Home to millions. Physical space – real estate – has never been so important, or, in the case of London, so valuable. Despite its palpability, real estate can be complex. For a start, there is a world of difference between commercial and residential real estate – they are distinct universes with different rules and norms. And then there is the difference between the two cities under scrutiny in this Focus – cultural norms, values, legal frameworks and the building stock itself are quite different in each. The articles that follow are by no means a comprehensive comparison of London and Paris commercial and residential real estate, but they do put a spotlight on some of the key differences and issues in our capital cities. In the commercial realm, the London real estate market is quite different to that of Paris. London commercial property investment is left to market players, with companies seldom tying up assets in real estate if it is not their core business, whereas this is not the case in Paris. Articles look at this phenomenon as well as office occupation trends and property investment yields in both cities. In the residential realm, one of the chief differences between London and Paris is the way property ownership is perceived. The British tend to regard their property, even if it is a home, as an investment, whereas the French see it primarily as a home. To some extent this drives the British obsession with property ownership, fuelling a market that is already strained by supply issues, and nowhere is this more so than in London, which this year surpassed its previous population record. While many have made fortunes out of property in London and will continue to do so, ever higher prices and a more cautious lending environment are shutting a generation of first-time buyers out of the market, and housing has never been so unaffordable, pushing many further and further out. Paris property prices make it a classic buyer’s market, especially for bargain hunters in areas most prized by overseas buyers. And despite its steep prices, London is still an attractive proposition for the investor given the strength of its economic fundamentals and the fact that supply is nowhere near meeting demand. For many of the French moving to or living in London, renting is the norm, and this Focus provides a quick comparative guide to the essential differences between the two markets. Rental hotspots and places to watch are also highlighted. For the property investor, London and Paris each have their pros and cons. Like any investment, ultimately it is a matter of individual appetite for risk, cultural preference and comfort level. In the words of Mark Twain,
‘You
pays your money and you takes your choice’. I KF
info - july / august - 29