September 2023: the real estate, tourism and hospitality press review

Last update : 3 October 2023

Temps de lecture estimé : 5 min. reading, Press Review

It's back-to-school month. HoliProject presents its September press review. The aim is to take a moment to identify, analyse and understand the key tourism, investment and property news stories of recent weeks. We have selected around fifteen articles to give you a better understanding of trends, market phenomena and emerging threats.

Investment : French Investors Turn Their Focus Towards Spain

In the first half of the year, French investments in European real estate reached approximately €3.2 billion, marking a 5% increase compared to 2022. Notably, Spain emerged as the top destination, capturing 32% of French capital, compared to an average of 13% over the past five years. The United Kingdom and Italy followed, each accounting for 18%. It is worth mentioning that investment strategies are diversifying from traditional office and commercial spaces to include senior living facilities among preferred assets. (Source: Le Courrier d’Espagne)

Tourism : China’s domestic hotel industry is booming

Sébastien Bazin, CEO of Accor, is convinced that “in no more than five years’ time, China’s domestic hotel industry will have surpassed that of the United States in terms of size”. In the emerging countries, which also include India, demand for hotel rooms is expected to grow by 5% to 7% a year. The problem is that supply is developing much more slowly, pointing to an imminent shortage of accommodation. As a result, “Accor will continue to grow where it is needed”, without compromising its environmental commitments, which have led the Group to abandon certain projects (Le Monde).

Office property : San Francisco, time for the inevitable rebound?

San Francisco’s office property market, the worst hit in the US since 2020, is showing signs of recovery. The main causes of the crisis: teleworking and the rise in crime in certain neighbourhoods. As a result, vacancy rates have reached record levels, and property values have naturally fallen. But the local market is picking up again, for the first time since the start of the pandemic, with an increase in searches for office space and transactions in the city. Among those looking to rent large spaces are companies linked to the artificial intelligence industry. Despite the stigma, and a still high vacancy rate, San Francisco remains a technology hub (Wall Street Journal).

Real estate : rethinking the way we design workspaces

Looking ahead to the summer of 2023, consultancy McKinsey has predicted an imminent write-down of almost $800 billion of office property assets in nine major global cities by the end of the decade. The reasons: the rise of teleworking, unprecedented interest rates and major imbalances. “The market is now following a Schumpeterian model, forcing companies and investors to adapt in order to prosper in this changing environment,” explains Mehdi Dziri, Managing Director of Ubiq. As a result, investors and architects are now having to rethink their workspaces to adapt to new uses and optimise space. In the Paris region alone, millions of square metres of office space are underused. (Les Echos)

Tourism : Europe attracted holidaymakers this summer

This summer, Europe has been popular with tourists, even forcing the introduction of visitor quotas in some places, such as at the Acropolis in Athens. Despite rising prices, flight and hotel bookings were close to pre-pandemic levels. The main reason: Americans, benefiting from a weak euro, helped to offset the extreme heat and persistent inflation. Among the big winners: France, Greece and Spain. On the downside, while booming tourism is an economic boon, it also exacerbates the problems of overtourism and highlights social disparities, reviving the debate on the need for more sustainable and inclusive tourism. (Financial Times)

Investment : commercial property worries in the United States

The commercial property market in the United States is in decline, particularly in San Francisco and New York, as a result of changing working habits. Incentives from local authorities are not enough to counter teleworking and, ultimately, revive the dynamic. In fact, this situation is having a major impact on companies specialising in shared workspaces. This is the case of WeWork, a company once valued at almost 47 billion dollars, which now finds itself with expensive and under-occupied offices. In a bad way, the American firm, which in the first quarter accounted for a quarter of new commercial leases in New York, is now considering revising its rental agreements to catch its breath (Le Monde).

Investment : the new challenges facing the French property market

In an economic landscape shaken by volatile interest rates, soaring inflation and intensifying environmental regulations, the property investment sector in France is at a crossroads. The market is divided into two major segments: residential and commercial property. There is still an undersupply of housing in France, but rising construction costs and high borrowing rates have made it difficult for developers and buyers to access credit, leading to a de facto fall in reservations and prices. Commercial property, for its part, has seen a significant fall in investment, with a marked drop in demand. Despite this, some sectors, such as logistics, are holding up well (Rothschild and co).

Commercial property : should we rethink “ugly France”?

It’s the subject of the moment : government and local councillors are aiming to redevelop town entrances, which have been disfigured by commercial activities. However, the Fédération des acteurs du commerce dans les territoires (Fact), which has 300 members, points out that these shops, criticised for their aesthetic and energy impact, are the economic lifeblood of these areas. Shopping centres recorded a 3.7% increase in footfall in the first quarter of 2023 and attract 70% of the population every month. Naturally, retailers are asking to be included in these urban planning and beautification projects. (Sud-Ouest)

Investment : the property market correction is a reality

The source of concern could be the correction in the property market. In reality, the major danger lies elsewhere: the reaction of customers to this new situation, leading to hasty sales and, de facto, major liquidity risks. Back in March, the European Central Bank (ECB) warned of the potential consequences of a downturn in the cycle, as warning signs began to appear, with a fall in transaction volumes and the anticipation of a correction by many investors. Now, “we’re there,” says Laurent Chaudeurge of BDL Capital Management. What was just a concern a few months ago has become a certainty”. (Agefi)

Tourism : encouraging summer results in Switzerland

In Switzerland, the results of the summer season are encouraging. However, there are challenges ahead: there are fewer international tourists than there were before the pandemic, and nationals are increasingly choosing to stay abroad. American travellers have partially compensated for this loss. But this is not enough, especially as price-sensitive groups have disappeared under the weight of inflation. Will the return of Chinese tourists enable Switzerland to return to pre-Covid levels? The situation should improve. “We have regained around 60% of air capacity for traffic between Switzerland and China,” explained Corinne Genoud, a member of the Executive Board of Switzerland Tourism. (Zone Bourse)

Tourism : Pierre & Vacances Center Parcs back in the game

The Pierre & Vacances Center Parcs group is showing signs of recovery one year after its financial restructuring. Turnover from tourism activities rose by 17% in the first nine months of the year compared with 2022. This is notably the result of an encouraging summer season, with a stable occupancy rate of around 90%, a 4% increase in the average price, and performances above 2022 for all the group’s brands. (Les Echos)

Tourism: Canton of Vaud Unveils Its Strategy

The Canton of Vaud in Switzerland aims to showcase its strengths and enhance its appeal. A new strategy has been revealed, involving close collaboration among various stakeholders across multiple sectors, including tourism, agriculture, culture, academia, and gastronomy. The objective is to attract tourists, particularly German-speaking visitors, capitalize on local richness, and generate new economic benefits. According to projections, the average length of stay for tourists is expected to exceed two nights, compared to the current average of 1.8 nights. Notably, the campaign will primarily target neighboring countries, the Benelux region, the United Kingdom, North America, and the Middle East. (Source: SwissInfo)

Investment : logistics property, a source of opportunities?

Pauline Collet, Director of Development at Alderan, manager of the ActivImmo SCPI, talks to PierrePapier about current opportunities in logistics property. Despite rising energy costs, increasing inflation and rising interest rates, the sector is holding up well. In fact, this asset class has gained in importance, thanks to the rise of e-commerce. “Before the health crisis, it had a low profile in the investment portfolios of individuals and institutions”, she confides. In recent months, the significant fall in prices for tertiary assets has prompted many funds to diversify into logistics property, which is “less dependent on fluctuations in mass consumption” and an essential pillar of world trade. (Pierre Papier)

Investment : commercial property as bank collateral?

Commercial property is frequently used as collateral by European companies. The problem is that when property prices fall, the impact on borrowing and the overall economy is direct. Linking companies’ access to credit to the property cycle and market fluctuations is a risky and complex approach. This is the subject addressed by VoxEU. Note that this new reality is part of a much broader context, marked by a significant rise in interest rates (CEPR).

Date de première publication : 26 September 2023

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