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Rental investment Marseille, Betting on a city with strong potential.
Investing in Marseille is an excellent option for real estate investors looking for an attractive return and a city with strong development potential.
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Investing in real estate in Marseille means choosing the second largest city in France in terms of number of inhabitants, and the third largest urban community. A city with very high potential that began its transformation some twenty years ago. Marseille has very strong advantages for rental investment, particularly because property prices in Marseille remain very low compared to other cities of this size. These low purchase prices make it possible to achieve higher rental yields than in other cities. But beware, more than in other cities, not all districts are the same.
That's why we started with Paris, Lyon and the Paris region. Our aim was to accompany you in your projects in Marseille by carefully selecting the best areas of Marseille. Our director of the Marseille area knows the sector very well: he grew up in Marseille and invested himself in this wonderful city. Follow the guide...
DEMONSTRATING ONCE AGAIN THE ATTRACTIVENESS OF THESE MAJOR REGIONAL CAPITALS
LES ECHOS, 2018
But let's be honest... the southern capital can be scary. Some districts are to be avoided absolutely, and I did not want to start the activity in Marseille without having an excellent hunter on the spot who knows the different districts of Marseille at his fingertips. Where to invest in Marseille? What are the best areas to invest in Marseille? Which district of Marseille to avoid? What rental yield in Marseille? What are the real estate prices in Marseille? I will deal with these different questions to give you a better idea of the Marseille real estate market.
In this article you will discover the peculiarities of the city of Marseille. What are the differences with other big cities such as Paris or Lyon. What are the strengths and weaknesses of Marseille for your rental investment projects? Which districts of Marseille should you focus on? Which districts to avoid? What is the price per square meter in Marseille? How much rent can you expect in Marseille? And finally we will talk about the best rental products that will allow you to get a good return on your investment in Marseille.
Real estate investment Marseille : the specificities of the 2nd largest city in France
Among the 10 largest cities in France, Marseilles is apart. With more than 860,000 inhabitants in 2020, it is the second largest city in France in terms of population, and yet, the purchase prices are significantly lower than in other major French cities (headed by Paris, Lyon or Bordeaux).this gap has two explanations: firstly, the population of Marseille is popular. With 12% unemployed according to the latest INSEE census, Marseille's economy is not as strong as in other employment areas. This is despite a positive trend, since the unemployment rate in the city has been falling steadily (it was 22% in 1995). On the other hand, unlike Paris, for example, the Marseilles city is more extensive, which explains the lower pressure on land.
Investing in Marseille: choosing a regional capital
The influence of Marseille is historic. Since antiquity, Marseille has been home to a first-rate commercial port. Today it is still the leading French port and even the fifth largest in Europe.
- Marseille is the leading economic centre in the south of France (source: Marseille Provence) and the competing cities are much smaller. Nice, which is behind Marseille and ahead of the southern cities in terms of population, has 350,000 inhabitants compared to 860,000 in Marseille).
- The city is also home to an interesting student population. The different sites of the University Aix Marseille, Ecole Centrale Marseille, Epitech, Kedge Business School are some of the establishments that host about 90,000 students spread over several geographical sites in the city.
Marseille: an excellent quality of life for its inhabitants
Inequalities are significant in the city. Some neighbourhoods are regularly in the headlines for news items (the northern neighbourhoods).
But beyond these very localized problems, life is very pleasant in Marseille. The climate and the 300 days of sunshine per year are a guarantee of good daily mood. Added to the blue sky, the creeks and the main roads such as "République", the Prado or the Canebière, it is a magnificent asset for this southern metropolis. What a pleasure to walk along the Corniche kennedy where you can find all the coves (anse des catalans, de malmousque, de maldormé, de l'oriol as well as the vallon des auffes).
The seaside makes millions of tourists dream: the beach (district at the bottom of the prado) or the islands of Friuli have something to amaze visitors and inhabitants alike.
And since real estate is cheaper than in other cities in France, the living areas are larger. This contributes to a better quality of life for the people of Marseille.
Real estate potential in Marseille: major renovation projects
The city of Marseille is undergoing major urban renewal projects, which are modernizing and restoring the cachet of this magnificent city.
In 2018 alone, the city has benefited from the redevelopment of the rue Paradis (parallel to avenue du Prado) and the new life of the former Belle de Mai maternity hospital transformed into a holiday club. Five years earlier in 2013, it was the Hôtel Dieu, located in the Panier district, which was transformed into a 5-star hotel managed by the Intercontinental group. In 2016, the southern part of the Old Port and the Centre Bourse benefited from a major renovation.
This dynamic and future renovation projects are part of an overall project that will make the city more attractive and unleash its potential. As we have seen in Lyon (numerous major projects) and Bordeaux, this type of renovation enables the city to develop tourism and attract investors over the long term.
In 2018 there was the delivery of the Tour la Marseillaise (designed by Jean Nouvel) on the quays of Arenc, the renovation of the Capuchin market in Noailles, and the start of work on the Place Jean Jaurès. By extension, this district, which includes the Cours Julien, the church of Notre Dame du Mont and the Place Jean Jaurès, is called La Plaine. It is a very popular place to live with many bars, restaurants and shops. It's a little bit the underground district of Marseille, where creators, artists and young people like to meet...) Discover more projects in Marseille here.
Real estate prices in Marseille by district
The average price per m2 in Marseille is around 2.800€ in 2020. The difference with other cities in France is striking since the average price per m2 in Lyon is 3.900€, 4.300€ in Bordeaux and Paris exceeds 9.000€ /m2. Despite the size and influence of the second largest city in France, prices remain equivalent to those of small provincial towns.
Be careful, however, as there are significant differences from one round to another. Thus, the most popular districts offer prices below 1,000€ / m2, while the price per m2 of properties in the most sought-after districts can exceed 6,000€ / m2. This high difference is to be put in relation with the strong inequalities within the city.
The trend is slightly upwards.
Seasonal rentals in Marseille
The largest city in the south of France is touristic, and vacation rentals in Marseille is a great opportunity for the real estate investor. It allows to boost the rental yield of the projects, but be careful with the necessary management. Many investors look at the return on short-term rentals in Marseille and forget about the related costs: high management fees, maintenance, cleaning, faster wear and tear, breakage and deterioration of furniture.
Château d'If and Friuli
As is the case in other cities in France (Paris, Bordeaux, Lyon) the number of properties available for short-term rental in Marseille has increased. This increase in supply and competition in seasonal rentals has led to a fall in the price of overnight stays.
Seasonal rentals can quickly become a full-time job for the investor and thus lose interest. We see rental real estate as an opportunity to create passive income... not to add to the workload.
Rental profitability: Marseille is very well positioned among the major French cities.
As you know, one of the financial indicators to measure the performance of a real estate investment is the rental yield. The rental yield, also called rental profitability, is the ratio of the sum of annual rents divided by the total cost of the operation. And when it comes to the profitability of rental investments, Marseilles is a good performer, with very attractive indicators.
In terms of rental yield, as always, the most popular neighbourhoods deliver the best returns, depending on the neighbourhood and the type of property. This is known as the "cost of risk". I don't recommend investors to go to the most popular districts of Marseille because the very high return is accompanied by too much risk in terms of neighbourhood population. Making 10% or more return in a city does not seem like a good deal to us.
On the other hand, the districts in the centre, the 1st, 2nd or 3rd arrondissements offer attractive rental yields of up to 6.5% for small areas and 7.5% for shared flats, offering an excellent risk/return ratio. Of course, from one street to another, the environment can change quickly and it is the advantage of having a support system like ours that will help you make the right choice.
Our hunters will accompany you in safe operations in the best areas of Marseille. We offer turnkey operations with yields between 5% and 7.50% depending on the areas selected. With a rigorous selection resulting from our fine knowledge of the Marseilles market. Contact us to start your investment in Marseille.
In which district to invest in Marseille? The districts to be favoured and the districts to be avoided in the Marseilles area
As an investor, we advise you to avoid certain areas of Marseille. In a very global vision of the city, remember that the northern part beyond Belle de Mai, La villette, Saint Mauront is popular, and that the southern part south of the old port and up to La pointe rouge is more chic.
First of all for the security aspect, northern neighbourhoods do not always offer the security that your future tenants can expect, which will lead to all kinds of problems during the rental period and a high turn over.
Second, because some areas of the city are poorly served by transport. This type of criterion makes all the difference when you offer your property on the rental market. You must take it into consideration from the start and integrate this criterion when you buy.
We advise you to favour the districts from 1st to 6th because they are very well served by public transport such as metro and tramway. Beware of boroughs served only by buses, which are not a good means of transport due to numerous traffic jams.
The northern part of the city is rather served only by buses, so it is an area we do not favour. For ease of transportation, we work more the southern part of the city to the terminus Sainte-Marguerite Dromel (terminus of the metro line 2).
Here is the map of real estate prices in Marseille, according to the districts.
2020 outlook for the real estate market in Marseille
2019 was a dynamic year for the Marseilles real estate market, with a 12.5 % increase in sales volume. The prices evolved in a heterogeneous way, indeed in the 3rd an increase of more than 15% was noted, approximately 5% in the 4th while for the southern districts we were rather on a light fall of the prices per m2 of the order of 1 to 2%.
The year 2020 looks set to be an upward trend with a good start and renewed interest from real estate investors in the city of Marseille. More and more investors are buying in Marseille because they see it as a city with strong potential, and call prices are getting higher and higher. Although we are cautious about the upward trend in square meters, Marseille has great potential for growth in the coming years, which is why we have set up our business there to help you benefit from it. But beware, in Marseille more than anywhere else, no half measures. Given the differences between neighbourhoods, investors are obliged to be cautious in their geographical choice of project: everything can change from one street to another.
You wish to invest in Marseille? Contact my team to discuss your project.
- Mickael Zonta
- Rental Investment Director
A graduate of a major business school, and after a first successful experience in finance, Mickael Zonta began his career in real estate in 2011 in Paris before extending his activity to the Paris region and the city of Lyon. The fact that he is also a real estate investor in a personal capacity allows him to understand clients' issues in terms of investment objectives, rental yield and choice of tax regimes.
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