FRANCE Law and Practice Contributed by: Antoine Mercier, Myriam Mejdoubi and Gabriel Dalarun, DLA Piper France LLP
1. General 1.1 Main Sources of Law The sources of real estate law are spread over various codes, including: • the Civil Code for property titles, transfers of ownership and civil leases; • the Commercial Code for commercial leases and administrative authorisations; • the Construction Code for the construction or repurposing of buildings; and • the Planning Code for planning and local planning regulations. 1.2 Main Market Trends and Deals The relatively unstable macroeconomic climate of the past 12 months (armed conflicts, major elections to come, instability of the interest rates, rise of inflation) has certainly resulted in a year of contrasts for the French real estate market. In 2023, the overall volume of real estate trans - actions was circa EUR15 billion, a significant decline of about 53% compared to 2022 – and to the yearly average volume of investment over the past ten years. France is not an isolated case, with the European market also falling 53%. Large-scale transactions have been relatively scarce, with fewer than 25 deals individually worth more than EUR100 million recorded, accounting for just a third of the volumes invest - ed. The breakdown of overall investment volume by class of assets was broadly in line with the past few years, with a steady predominance of offic - es (44%) followed by warehouses (21%), retail (21%) and hotels (14%).
Value-add strategies have been a signifi - cant trend over recent months, and increased approximately 30% in 2023. Real estate opera - tors were also fairly active in the year, with a 122% increase in sale and lease-back transac - tions compared to 2022. Foreign investors have been less active this year, their investments representing just 27% of investment volume in 2023 (compared with 40% over the past few years). The market has shown quite encouraging indica - tors in recent months as interest rates have sta - bilised and even fallen. Inflation is also steadier. Potential investors are therefore gaining much more visibility. 1.3 Proposals for Reform Environmental factors have an increasing impact on the obligations borne by all French real estate market participants. Recent meaningful exam - ples of this trend include: • the law relating to the acceleration of the production of renewable energies (loi relative à l’accélération de la production d’énergies renouvelables) of 10 March 2023, which aims to develop renewable energies, in particular solar energy by requiring installation of solar panels on half the surface area of parking lots larger than 1,500 square metres from July 2026 or July 2028 depending on the type of management and surface area; further, among other obligations, certain buildings must also be equipped with renewable energy production systems or by vegetation systems with progressively increasing minimum cover - age (however, the law provides for specific exceptions to be specified by decree); • the “Net Zero Artificialisation” (Zéro Artifi - cialisation Nette, ZAN) law of 20 July 2023 to
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