We hope to find in the half-yearly results that have just been released a few keys to understanding the real estate market, which is still in the doldrums.
Listed real estate investment companies are proving resilient. Occupancy rates are still on target for most retail and office property companies, with the exception of suburban offices. Organic rent growth is still present, still driven by solid indexation, which will not last. Organic rental growth is once again alive and kicking in the office sector, particularly in the CBD, with the exception of the suburbs. Values, which had stopped collapsing at the end of 2024, are not really seeing any significant change... with the exception of office space in the suburbs, where they remain on a downward trend.
This resilience has enabled the best performers - by which we mean those who have managed to control the level and cost of their debt - to raise their guidance for 2025 very slightly. But that's no reason to call it a rebound... Indeed, the financial markets gave this first salvo of results a cool reception.
Resilience is also to be found among the few listed developers. The first of these - Nexity - has published half-yearly results that have reassured investors of its ability to make savings in a new housing market that shows no signs of picking up.
The rebound is still a matter of convictions. And investors are starting to take a different look at real estate. Across the Atlantic, Blackstone is reassuring. "The good news is that it's a question of when, not if [the real estate market] will recover," explained Jon Gray, Blackstone's President and COO. The asset manager raised more than $7 billion in real estate duringQ2, $1 billion more than the previous quarter.
With westerly winds prevailing, some are beginning to hope for a return to better fortunes for the real estate markets. This is what is motivating some investors to raise new funds, especially value-added ones, such as BlackRock in Europe and Telamon in France this week.
For the time being, this remains a gamble. See you in a few years' time to see if it pays off.