UNPI 25 Million Owners
Praised for its international openness thanks to its European and cross-border dimension, the quality of its higher education, the wealth of its cultural offering and its policy in favor of soft mobility, the city appeals to young households as well as families with children.
“Investors must think district by district”
For Me Gérard Weber, President of UNPI Grand Est And President of the Strasbourg Chamberinvestors have an interest in scrutinizing the Strasbourg districts currently undergoing or awaiting rehabilitation.
The Strasbourg rental market is traditionally sought after in its centre and hypercentre. Is it in the interest of investors to focus on these two areas?
Me Gérard Weber, President of UNPI Grand Est, President of the Strasbourg Chamber: Let's start by sending a good signal to investors, rents are generally supported in Strasbourg because demand is constant and the market is tight! The hypercentre is a very specific market, in fact quite tight. This area, called the Grande-Ile, is surrounded by the two branches of the Ill. It is historically the most interesting district of the city. It is famous for the nobility of its buildings around the cathedral and in the sectors with preserved pure 18th century buildings, not to mention the charms of Petite France, with its canals and half-timbered houses. Rents there are the highest in the urban area, with an average of €10.70/m² according to the latest Local Rent Observatory of Bas-Rhin (table opposite, Editor's note). But profitability is not necessarily the most interesting, because the average purchase price is around €7,000/m², even if these prices must be refined from one street and one building to another and vary according to the condition of the building and its possible renovation. For investors, an interesting carryover market is found with the Neustadt, the old German district with very beautiful 1900 buildings, whose rents are slightly lower, at €10.50/m², for significantly lower purchase prices. This district also has an advantage in the eyes of some tenants, because it is easier to get around by car and park there than in the hypercentre.
Where are the opportunities for investors?
The Gare district, which is only a few minutes from the historic center, on the other side of the Ill, is considered a poor relation, with its rarely restored buildings and its lack of quality shops. Investors may want to take a look at buildings requiring renovation, because demand is such in Strasbourg that this district will eventually rise again and become attractive again. On the other hand, be careful to monitor the metropolitan executive's project to set up prior authorization for rentals in this district. This system is provided for by the ALUR law in order to combat slum landlords renting out dilapidated housing. While the intention is laudable, it is necessary to ensure that the checks are carried out objectively.
It seems that some districts of Strasbourg still contain too many thermal sieves. Is this really the case?
If there are so many homes considered to be thermal sieves, it is because their owners, whether they are occupants or lessors, simply do not have the means to finance their renovation. Beyond the administrative consequences, a DPE F or G classification translates into daily discomfort for occupants, excessive heat in summer, cold in winter and high energy bills. Which no one wants! And for owners, it leads to a depreciation in the value of their property with the ban on renting it out from 2023. It is for this reason that districts such as the Gare, around the Place de la Porte Blanche, the Boulevard de Metz and the Boulevard de Nancy, are seeing entire buildings for sale as single-ownership properties. These can be interesting files for investors with solid financial resources. The situation is a little different in Koenigshoffen, an old district west of the train station, where owners generally do not have the means to renovate while tenants do not have the means to buy. As a result, the market currently appears frozen. In these conditions, it seems more interesting for investors to head towards the second ring, where you can find housing to renovate for €2,000 to €2,500/m².
What about the new market?
In Strasbourg, the new-build market is essentially an investor market. With many high-quality programs between the Place de la Bourse, the Parc de l'Étoile and the German border, on former industrial wastelands transformed into housing. In the center, developments remain rare due to a lack of available land.
The increase in the price per m2 since 2020, particularly in the centre, could it not give rise to fears of a degree of speculation?
The transformation by Bouygues Immobilier of the historic post office in the Neustadt district has caused a lot of ink to flow. This building, completed in 1899 when Alsace was annexed, will house residential housing, offices, a retirement home, a brasserie and a post office by next year. Which in itself is rather positive. On the other hand, I am surprised to see that the most beautiful apartments were sold for over €10,000/m², without balconies or terraces, with living rooms that were not originally designed to be used as housing. Buyers, many of whom are investors, cannot expect any profitability with such prices. But perhaps this is the result of an essentially bohemian approach, since this address allows you to get to the historic centre of Strasbourg on foot or by bike…
What advice would you give to potential investors?
It is essential that the property(ies) they are considering buying are located near a tram line. Strasbourg as a whole is clearly positioned as a pedestrian city, where public transport and soft transport are favoured. This sometimes leads to perverse effects, with the development of numerous commercial areas on the outskirts, aimed at a family clientele who need a car to get supplies. It should be noted that, by a paradox of History, we are still very far from the extent of the tram network as it existed before the War, with lines that went all the way into the countryside… Another piece of advice to give to investors is to closely observe the opening and closing of shops, district by district. Place Kléber has thus fallen in terms of quality with the arrival of the tramway on Place de l'Homme de Fer, which has led to a complete change in its usual clientele. Another example, the Quai des Bateliers, opposite the Château des Rohan, saw its shops change when it was pedestrianized. This quay has become a major tourist destination, it is true that it is very pleasant to walk there. But our members now complain about noise pollution, which is generally a bad sign in terms of real estate.