French commercial real estate sees 3.3% return in 2025

French commercial real estate investments yielded a total return of 3.3% in 2025, building on a recovery that began in 2024 after a significant downturn in 2023.

MSCI France Annual Property Index

This positive trend is detailed in the MSCI France Annual Property Index.

The improved performance coincides with a 27% increase in French real estate transaction activity in 2025 compared to the previous year, boosted by a strong close to the year.

However, performance varied across different property types. Offices in the Paris Central Business District (CBD) were top performers, achieving a 6.8% total return, largely due to a 3.3% increase in capital growth. Investment in this segment reached its highest level since 2020.

Conversely, office markets outside the Paris CBD, including the broader Île-de-France region and other major cities, continued to see a decline in capital values. While still negative, these declines were less severe than in 2024. These areas are still grappling with high vacancy rates, exceeding 20% in some parts of Greater Paris.

Retail and residential properties showed signs of stabilizing in value, while healthcare assets are still undergoing a period of adjustment.

Over the last decade, French real estate has delivered an average annual return of 3.9%, which is lower than the long-term average of 7.2% per year over the past 28 years.

Carine Dassé, executive director at MSCI, commented: “Hotels and industrial assets continued to deliver total returns above 6%, supported by both positive capital growth and income returns levels of 5.7% et 4.9% respectively.”

The MSCI France Annual Property Index, as of December 2025, analyses the performance of 7,300 properties with a combined value of €185 bn.