This Analyses et Synthèses release draws on the analysis of data provided by the five leading French banking groups as part of the survey conducted by the Autorité de contrôle prudentiel et de resolution (ACPR).

After the Covid crisis, global commercial real estate markets bounced back in 2021, with the annual amount of investment reaching its highest level in ten years. However, the situation appears more contrasted in France, where investments were slightly lower than in 2020.

In this context, the production of loans to real estate professionals by French banks was nevertheless strong: it increased by 13.4% annually to reach EUR 86.8 billion, while exposures increased by 9.3% to reach 250.5 billion.

Besides, most risk indicators continued to reflect the good quality of the portfolios: for instance, the ratio of gross doubtful and impaired exposures continued to decrease to stand at 2.07% at the end of 2021 (-0.5 percentage point (pt) compared with end-2020). At the same time, the ratio of restructured loans in good standing increased significantly (+36 basis points (bps) at 1.34%) while transactions for which the pre-sales ratio is nil reached their highest level since 2015.

The macroeconomic context is however marked by higher interest rates and inflation, which notably affected construction costs. Structural changes were accelerated by the Covid crisis, which affected the office segment (expansion of teleworking) as well as the retail segment (growth of e-commerce). This could lead to an increase in short and medium term credit risks.