IN BRIEF

At the end of the first quarter of 2025, after a fairly calm February, the markets were feeling the effects of the US Administration's announcements. The rise of widespread protectionism, with no clear assessment of its effects, geopolitical upheavals unprecedented in 80 years, the risk of recession in the United States, and a possible rebound in inflation - all these factors have pushed up long rates without affecting the level of short rates for the time being. The expected downward trend in short-term rates could therefore be postponed, particularly by the Fed.

In this environment, which offers no visibility on the economic situation or on trade and investment flows, the real estate sector and, more generally, the infrastructure and urban economy sectors, which are not directly affected by changes in international trade rules, are not, or not yet, safe havens. It is still marking time, with the risk of further rises in long-term interest rates, all the more so as, with the exception of the residential and hotel sectors, price recovery does not appear to be complete. Investment is at a standstill in the tertiary and commercial real estate sectors, credit is scarce, developers are burdened with ailing inventories, and listed and unlisted real estate structures are seeking to adjust their NAVs.

With regard to listed real estate in the traditional sense, represented by SIIC and non-SIIC real estate companies, the first quarter was negative for the EPRA European benchmark index at -1.15%, while equity markets, which fell sharply in March, maintained a positive quarterly performance of 5.77% based on the STOXX 600. Our EURO IMMO-SCOPE mutual fund outperformed at +6.08%, once again demonstrating the quality of a diversified model embracing the entire value chain of the real estate and urban development industries. In the current context, this asset class, rooted in European territories, should not be overlooked.