20 March 2005

DUBAI -- Middle East investments in Paris real estate has increased by six folds during the past five years, according to French officials speaking at a seminar in Dubai yesterday.

Speaking at the second annual seminar of Paris lie de France Capitale Economique yesterday Thierry Jacquillat, Chairman of Paris-lie de France Capitale Economique said Paris is the biggest and most efficient real estate market in the world.

"A high level of turnover averaging a return of 15 per cent per annum since 1999 has made Paris the most attractive city for investors. Over the past five years Middle East investments in Greater Paris business real estate have risen six-fold from zero to six per cent,"  Jacquillat said.

Greater Paris offers 47 million square meters of available business space, the second largest in the world, and in the first quarter of 2004 boasted a record investments of 5.2 billion euros (Dh26 billion).

Since 1999, the French authorities have introduced a series of measures to favour investments in French real estate sector. "A series of measures including reduction in transfer taxes; simplification of the real estate capital gains taxation for individuals and creation of French Open Ended Funds have helped in attracting huge foreign investments in the French real estate sector," said Frederic Nouel, Partner, Gide Loyrette Nouel. The real estate capital gain taxation for individuals has been drastically simplified in 2004 and now is 16 per cent, same as applicable to non real estate capital gains. The new tax regime also provides for a yearly rebate of 10 per cent after first five years of holding the asset, making the capital gains tax nil by the 15th year.

In addition to the real estate, Paris also offers attractive investment options on the French capital market.

Paris has the largest stock market in Euroland and is a major centre for asset management with 1.6 trillion euros being managed, close to the figure managed in London. it is the leader in Euroland in terms of market capitalisation at more than 1.6 trillion euros.

BY A STAFF REPORTER

© Khaleej Times 2005