Primonial REIM devises, structures and manages long-term collective real estate investments intended for individual and institutional investors. Primonial REIM manages €33.5bn of assets, 61 investment funds and more than 1,526 buildings in Europe. Our teams are made up of more than 400 employees located in six offices in France, Germany, Luxembourg, Singapore, Italy and the United Kingdom.

Strategic corporate development

  • A belief-based management style taking into account macroeconomic and microeconomic dynamics as well as demographic and societal developments.
  • Robust asset allocation based on the sector, geographic and product diversification.
  • A wide range of investment solutions with readable strategies by fund offering, recurring and attractive income with moderate risk taking.
  • A pioneer and leader position in responsible investments with an ESG approach integrated into the value-creation chain and massive investments in socially useful sectors such as healthcare/education property or affordable residential property.

Performance verification

The performance of some of our funds and assets is compiled, calculated and verified by MSCI.

Sector forecasts

OFFICE: Turning to our forecasts for 2022 to 2026, we believe that total returns for offices in Europe are likely to average between 4.0% and 5.5%. This projected performance is lower than the 8.6% seen over the past decade. Total returns will be driven more by income returns (between 3% and 4%) than by capital growth (between 0.0% and 1.5%). Adjustments to rates of return should be expected in 2022 and 2023. Turning to individual markets, we think that Madrid, Amsterdam and Vienna are examples of markets that could offer strong total returns through to 2026. Large and liquid markets, such as some sectors in Paris or major German cities, will also offer a solid performance over time whilst retaining lower volatility than in shallower markets. By 2026, the office real estate sector will be facing several challenges. One of these will be the energy transition. We believe that assets and markets adapted to the new landscape of workplaces and meeting ESG criteria, with solid tenants and long leases are likely to see better prospects for growth in prices, rents and space let. The question of renovating certain assets needs to be addressed due to the increase in cost of raw materials and the cost of financing. One of the other challenges will be the consequences of hybrid working on office demand over the short to medium term. Thus, markets able to maintain or guarantee strong economic growth and with the capacity for significant job creation will have the greatest need for space.

RESIDENTIAL: Our forecasts for 2022 to 2026 suggest overall returns of between 4% and 6% in Europe, slightly below the average of 8.5% over the past decade. In the short term, the sector could continue to be. driven by its capital performance, but there could be a rapid reversal in certain markets. Indexation will pick up the running to boost yields via rents to offset the increase in interest rates. By country, we think that the Netherlands, Germany, Spain, Austria and France are amongst the markets which offer a reasonable risk-return profile. The imbalance between housing supply and demand is feeding into upward pressure on residential prices. Growth in the number of households remains a factor in favour of the European residential market, particularly in large cities. This situation helps underpin demand both for the rental and home purchase markets. The rental market will also benefit from the build-to-rent strategy, a source of real estate supply which meets current household needs. Regarding ESG issues, the residential sector already faces tighter regulations to meet standards for reduced energy consumption and carbon reductions (with a ban on letting apartments where the energy performance audit is below a certain level). Lastly, the European residential market is highly regulated at the country level to protect tenants. Indexation, which is generally linked to the consumer price index, provides total or partial protection against inflation.

RETAIL: We forecast average returns from retail assets of between 4% and 5% from 2022 to 2026, a level relatively close to the 5.4% seen between 2012 and 2021. After an automatic rebound in capital gains in 2022, we expect to see more modest performance levels, driven by income returns, in 2023 and 2024. Street level shops in cities such as Berlin, Paris, Lisbon, Brussels and Munich have relatively strong prospective total returns between 2022 and 2024. Although high inflation is likely to hit consumer spending in the short term, strong savings levels will provide a buffer that will feed into household budgets. Meanwhile, forecast revenue growth at store chains is likely to underpin rental growth. In general terms, ‘bricks and mortar’ retail will need to continue to manage the growth of on-line sales, which will produce contradictory trends in Europe.

HEALTHCARE: We believe that total returns for healthcare assets in Europe are likely to average between 4.5% and 6% between 2022 and 2026, which is below the average of 8.25% over the past decade. Total returns will be driven by income returns and to a lesser extent by capital growth. By country, we think that the markets in France, Germany, the UK, Spain, Italy, the Netherlands and Sweden are the deepest and most liquid markets and will have the ability to deliver the best performances.

The coverage of a significant share of healthcare expenses by the public and/or private sectors, together with demographic growth in the older population, are factors favouring healthcare real estate. The imbalance between supply and demand will persist, especially as demographic pressure will remain strong over the next five years and then continue to increase over the following decade. The obsolete part of the existing care home stock in terms of ESG criteria and the lack of supply in the market make a powerful case for investment in recent, well-located assets with a solid operator.

HOTELS: With tourism and travel starting back up in 2022, our forecasts for the performance of the European hotels sector between 2022 and 2026 are for average total returns of between 3% and 5%, lower than the 8.4% of the past decade. At the same time, rising interest rates could rapidly affect capital performance in 2023 and 2024. By country, we believe that the leisure hotel segment (Spain, Italy, Portugal) and business hotels (the Netherlands, Germany) in markets that will recover in the run-up to major events, such as the Paris Olympics in 2024, offer a diversification of risk and thus better performance. Although considerable uncertainty remains due to the deterioration of the geopolitical situation, hotel performance indicators are likely to continue to rise, driven by the sector’s strong recovery.

Investment principles & strategy

Primonial REIM devises and implements investment strategies on behalf of its institutional and individual investor clients.

We make investments in every asset class for these clients:

In France

  • Core/core+ office assets located at the heart of Greater Paris, i.e. “head office buildings” occupied by major corporate clients. In the euro-zone:
  • Healthcare/education establishments under long-term lease to pan- European operators
  • Residential assets located in major European cities where there is a rental housing shortage
  • High street shops in prime locations
  • Budget hotels backed by major operators


Each of our entities has a designated compliance officer. All regulated issues are subject to compliance approval. The Data Protection Officer of Primonial REIM supervises and ensures all entities are compliant regarding the GDPR issues.

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