house purchase – Reims: return to pre-crisis prices

01-12-2018

Subject to legislative, regulatory or jurisprudential modification.

After ten years of decline or stagnation, real estate prices in the largest city in the Marne are starting to rise again. But the houses there remain affordable, while its pleasant living environment and its proximity to Paris make it an attractive metropolis for investors.

Long nicknamed “the sleeping beauty”, the 12^e city ​​in France (184,000 inhabitants) has woken up. This awakening dates back to approximately 2007, the year the East European high-speed line came into service, which has clearly boosted the local economy. This is evidenced by the spectacular metamorphosis of the area around the Champagne-Ardenne TGV station in Bezannes, on the outskirts of the city. Originally planted in the middle of fields, it now serves as the gateway to a vast business park where residential buildings, head offices, office buildings and green spaces coexist, in the middle of which sits an authentic golf course! The largest private clinic in France opened its doors there last May, with the stated aim of attracting Parisian patients, a clear sign of the attractiveness of this vast area located to the southwest of the Reims metropolitan area, 40 minutes from the Gare de l'Est by train. Serving the North-East quarter of France, but also the West coast of the country via Rennes, Nantes and Bordeaux, Bezannes station is the little sister of Reims central station, itself served by the TGV from the capital. The historic station has also benefited from the spin-offs of the high-speed train, as shown by the growth of the Clairmarais district, located around it, a mixture of tertiary activities and new housing a few steps from the city centre.

The people of the Paris region and the TGV effect

So there was indeed a TGV effect, even if it was not immediate. “His arrival had little impact at first, even if it helped to settle the population that was going to work in Paris”estimates M.^e François Gauthier, spokesperson for the interdepartmental chamber of notaries of the Reims Court of Appeal, and also a member of UNPI 51. But the Reims notary notes that from now on “People from the Paris region are moving to Reims, thanks to the combined effect of the TGV and teleworking”. These 5% of buyers from the Paris region are perhaps not unrelated to the demographic growth observed on the scale of the urban community of Greater Reims: an average increase of 0.5% per year between 2010 and 2015, or 6,700 additional people. This increase in population, coupled with the increased accessibility of the urban area by rail, has not left real estate developers indifferent, who have multiplied large-scale operations in recent years. The latest is the project to build 690 housing units orchestrated by the Quartus group in the Pont de Vesle sector, under the windows of the convention center. This ambitious program should start to emerge from the ground in 2019, for delivery in 2022.

A seller's market

The social landlords of Reims, historically strong, are not left behind in terms of construction or renovation. Reims has one of the largest HLM parks in France, with around 45% of social housing. The counterpart, “these rents are a little lower than elsewhere”as noted by the notaries' representative. Reims also hosts a large student population (30,000 students), particularly solvent when it comes to students enrolled in the leading grandes écoles (Sciences Po, Neoma Business School), which boosts demand for small areas. Particularly among Parisian investors that Karine Hoyet, from the D'Erlon Immobilier agency, says are attracted by “favorite products that they can’t buy in the capital” : Haussmann-style buildings located in the “golden triangle of Reims” (Forum, Boulingrin, town hall), where the m² can reach 3,500 euros for old properties and 6,000 euros for new properties. Karine Hoyet also believes that sellers are “in a position of strength” on the Reims market, in the sense that a high number of buyers are competing for a limited number of properties. “It is entirely possible to self-finance an acquisition through rents, because rental profitability reaches 7 or 8%, underlines this one. So I recommend buying rather than renting. Reims is a city that may seem a little expensive, but where the investment is safe. The whole thing gives “a dynamic and fluid market”which translates to a number of transactions “quite high”within deadlines “reasonable”according to notary François Gauthier.

A more flexible PLU

With six sites listed as World Heritage Sites, and although it does not have a protected area (a study is underway to define its perimeter), Reims has a rich architectural heritage, very steeped in Art Deco. And for good reason: 80% of which was razed in 14-18, the Marne sub-prefecture can be seen as a city dating from the interwar period. The modified local urban plan approved in 2016 has also increased the number of buildings of heritage interest to be protected: 330 today. The city subsidizes their renovation (€60,000 paid in 2018 for the renovation of the facades). This PLU authorizes building a little higher than before on certain avenues (avenue de Laon, avenue Jean-Jaurès, etc.), in the interests of architectural coherence and urban integration.

Modernization at work

Some arteries have also radically changed appearance since the return of the tramway in 2011, after more than seventy years of absence. All along its eleven kilometers of route, the roadway has been redeveloped and greened. A touch of modernity accentuated today by the Reims Grand Centre project, which will provide the largest city of the former Champagne-Ardenne with high-level infrastructure: a multi-function event hall with 9,000 seats and an aqua-fun complex, in place of a railway wasteland located on the edge of the city center and the recently restored Boulingrin halls. The Promenades, which mark the border between the city center and the station district, will also be transformed into a mini-Central Park. The reconstruction of the university hospital center is the other cornerstone of the city's rejuvenation.

Interview with Joël Pérignon, president of UNPI 51

How is real estate doing in Reims?

Real estate is doing well. It is a dynamic market, especially compared to Châlons-en-Champagne, the prefecture of the Marne department. This is evidenced by the number of cranes that can be seen in the city. There has not been so much real estate development since 2006-2007. This is linked to the economic situation, but also to history: there are only 33% of owners in Reims, compared to 58% on average at the national level, because of the strong presence of social housing. So we are perhaps witnessing a catch-up effect.

Is the Real Estate Show organized every year by the newspaper L'Union and its advertising agency a reflection of this local dynamism?

It is true that we meet a lot of investors and developers there. I think that the Champagne winegrowers are not strangers to this phenomenon, especially in years of good harvests. We also see Parisian investors arriving. If the city center is so in demand, it is also because the train station is located close to it. Reims is generally an attractive city, three-quarters of an hour from Paris by TGV.

Would you say that Reims is a good plan for investors?

Yes, because prices are still relatively low compared to other cities. The city is well served by road and rail, the living environment is pleasant. Many industrial or military wastelands are being reclaimed by housing, and there are many new apartments. But the old, certainly of lower quality, still has a card to play, provided that work is undertaken to renovate the housing. There are still good deals to be had, especially since the rental stock is largely held by people who are getting older. I will conclude by saying that in the long term Reims is a good investment, in new or in old properties to be renovated.

Interview with Catherine Vautrin, President of Reims Métropole

Frederic Marais

Source : 25 million owners • No. December 2018

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