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Will there be more Americans in Paris?

Grand Paris offers investors new opportunities in American favourite La Défense


Paris, 17 September 2015 –  In the latest installment of the “Grand Paris and commercial real estate: future trends” series, JLL looks at how the new transport links brought in by the Grand Paris project will transform both the physical and business landscape of the world-renowned La Défense district by 2020.

“The arrival of new transport links as part of the Grand Paris project will make it possible to develop a new district to the west of La Défense. The projects planned on this site and in La Défense will be a huge boost to the business district, further elevating it on the global stage as a modern business hub. This development will create new investment opportunities which will no doubt be of particular interest to American investors who have long taken a keen interest in the district,” explains Virginie Houzé, Research Director at JLL.

La Défense, the market of choice for American investors in Paris
Over the last 10 years, international investors have accounted for two thirds of investments in Paris with La Défense as the preferred target.
Americans have been the dominant international investor over this period, accounting for $5.2 billion. These investments include some of the largest deals ever taken place in La Défense and Paris as a whole, such as the sale of Cœur Défense to Lone Star in 2014 for €1.3 billion.
Today, US investors continue to be active in La Défense with the Goldman Sachs / Altafund acquiring the Pascal tower this year with the aim of redeveloping the building.
With its 3.4 million sq m of office space, 1,500 headquarters and 180,000 employees, La Défense is Europe’s leading business district and is the 3rd largest office market in the world. Its iconic towers designed by leading architects are frequently compared with Manhattan and is home to 15 out of the world’s largest 50 companies
No less than 40% of the companies based in La Défense are American-owned.
“In recent years, many investors have invested in La Défense seeking value creation opportunities. This market offers investors a highly attractive area: a mature and liquid market, redevelopment opportunities and is a target for major international occupiers. For example, Beacon Capital Partners bought AXA's former tower as a redevelopment project as part of the “La Défense Renewal Plan”. The new tower, named “First” was immediately leased to EY and Euler Hermès and achieved peak market rental values.” explained Houzé.

New opportunities to the West
La Défense’s success has led to a growing need for transport improvements. New links are due to come into service by 2020 with the arrival of a new regional rail (RER) line linking La Défense to the centre of Paris. Further services due to be implemented by 2025, such as a subway/underground line, will considerably reduce journey times from La Défense to Paris-Charles-de-Gaulle international airport.
La Défense is undergoing a process of renewal in order to meet new corporate requirements as well as changes in the global economy: existing stock refurbishment is underway and the development of new projects across the wider "Seine Arche” area which will be connected via new transport links.
“The projects underway in La Défense, combined with transport service improvements, aim to create the right conditions for the development of an enlarged business district. On completion, this new La Défense will stretch from the Seine on the West to the Seine on the East combining a number of unique economic success factors that aim to attract and retain major corporates and investors: a varied and new real estate offering, additional hotels, housing, even better public transport, more welcoming and lively surroundings, all within close proximity to the decision-making centres of large international groups”, concludes Houzé.


The full report can be downloaded from the JLL website: http://www.grand-paris.jll.fr/en/