France is expected to launch open-ended unlisted real estate funds in 2005. This could attract vast interest from retail investors, as they tap into high property yields, according to Alain Brochard, the head of Frances property association, ASPIM.

Brochard said: "We have confirmation for the product from the senate but we need to work out the details with the regulator."

Open-ended property funds, or OPCIs, which allow investors to buy and sell units on a frequent basis, have proved popular in Britain and particularly in Germany.

Brochard said the new funds could lead to a significant expansion to the countrys existing €11 billion (£7.6 billion) real estate fund industry.