Lawyer Monthly Magazine - March 2020 Edition

27 MAR 2020 | WWW.LAWYER-MONTHLY.COM My Legal Life By François-Régis Fabre-Falret, LPA-CGR avocats Further, what challenges do foreign investors have? Do they need additional authorisations to complete their real estate transactions? It is very easy for foreign investors to carry out investments in France. They do not need any further authorisations to complete except specific taxation to be taken into account (in particular when reselling the asset i.e. taxation on capital gains), depending on the country from which the investment is carried out. It is therefore important to examine the tax treaty applicable when structuring the acquisitions of the real estate interest. Anti-laundering rules will need to be cleared. How long does a typical transaction take to complete in France, in this area? A typical real estate transaction in France will take approximately three to six months (excluding the duration of the marketing of the building itself). Such timing starts usually when the parties agree on the letter of intent with an exclusivity period of around three to six weeks granted to the purchaser to carry out the technical, legal and tax due-diligence process. At the end of this initial period, the purchaser is supposed to confirm the price. An extension of the exclusivity period can then be granted to negotiate the contractual documentation before signing (execution of a call option agreement or a sale and purchase agreement). Closing usually occurs between two to three months following the signing. How competitive is Paris at the moment, in regards to real estate? The real estate market in Paris and its region has been extremely buoyant in 2019 and is projected to remain extremely attractive in 2020. Paris is the leading investment market in Europe and is highly competitive, driven by the strength of domestic equity buyers such as SCPI and OPCI funds to secure income, as well as South Korean capital. German funds are also returning to this market. Investments mainly focus on office buildings but there is also a true appetite for hotels and alternative assets such as residential (in particular co-living) or healthcare properties/nursing homes. “We are organised as if we were legal project managers with a clear goal: assessing rapidly the legal risks”