Henderson Global Investors believes that investment in the French property market is once again looking attractive and is exploring opportunities to recommence investment by focusing on prime Parisian offices and wide prime retail assets, both of which it believes are beginning to offer real value, having fallen 30-40% since the market peak in the summer of 2007.

For prime Paris offices, Henderson is forecasting that in the second half of 2009, net initial yields will stabilise between 6-6.5% unless there is significant and unexpected deterioration in the current economic conditions.

Henderson also views the French retail market positively. It has previously been very difficult to penetrate for foreign investors and is seen as very defensive, being characterised by low volatility, stable long term income and an excellent risk profile. Tenants have good rent to turnover affordability and vacancy rates are low to non-existent for the best centres.

A major reason of Henderson’s positive assessment of the French market is the relative resilience of its economy during the financial crisis. Its medium term outlook should be characterised by resilient domestic demand as a result of lower levels of household debt. In addition, France has a lower dependency on exports compared with other core countries such as Germany and the Government has provided prompt support for the economy via various economic stimulus packages.