It is now the turn of the Chinese government to invest in the high end Parisian property market. The China Investment Corporation is currently looking for investment opportunities in the heart of Paris and the $410 billion sovereign fund is attracted by the higher yields provided by the French estate market. Starting from zero, China has become the second foreign investor in Parisian real estate. The Chinese Corporation now accounts for 15% of the total amount invested by sovereign funds just after Qatar which represents 30% of the French market.
China has made the biggest property deal by buying a property portfolio of 508 million euros earlier this year, partly composed by offices and luxurious properties located in the heart of the French capital. The expected yield for prime property market now stands at about 4.75%, a little higher than mainstream financial assets.
The China Investment Corporation has chosen to focus a larger part of its investment strategy in Europe, after a 4.3% loss to its global portfolio in 2011, investing in prime properties in both Paris and London. Of course the Asian and Middle Eastern investments will remain the largest part of the portfolio. This trend is a good indicator of stability and profitability for those who want to invest in France as private money often follows sovereign wealth money which is a good indicator of stability in the market. For those with more modest budgets than the CIC, French mortgages allow you to buy a property at rates below 4% with a minimum deposit of 15% + stamp duty and mortgage registration tax.