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The property development arm of French firm Bouygues is active across Europe in all sectors, and is a market leader in sustainable building
Nearly 40 years after Francis Bouygues founded his company in 1952, he left to set up a film production company. Three years later, The Piano, a film the company produced, won a Palme D'or and three Oscars. Bouygues Immobilier, the parent company's property development arm, is also setting off in new directions as it faces a faltering residential market and an increasing need for sustainabiliry.
Bouygues Immobilier is one of Bouygues' six subsidiaries, which cover the construction, transport and telecoms industries. It is a property developer in the office, retail, residential and hotel sectors, operating in France, where it has 35 branches; as well as eight branches in Spain, Portugal, Germany, Belgium and Poland. This year the company sent one person to explore the Romanian market and, if all goes well, it will set up a subsidiary in that country by the end of the year.
"It is difficult to start in a new market," says Philippe de Lassus, investment director at Bouygues Immobilier. "If we don't set up there, we will settle in another central and eastern European market. Romania is attractive, because the country's population is more than 45m. It is very hard to go into a small country."
Residential assets account for 50% of Bouygues Immobilier" s business, with offices at 40% and retail at 10%, although the sector proportions are changing in light of the residential market's problems The share of Bouygues Immobilier" s residential business is falling to 45%.
Although hotels are not a key business, the company will develop a hotel if the opportunity arises. Companies such as Accor, France's largest hotel developer, have in-house developers and make the market almost impenetrable.
France remains the key market for Bouygues in terms of sales and last year comprised 93.6% of Bouygues Immobilier's business. For retail developers, France is a difficult market because CDECs, or retail licenses, are rarely issued and schemes are not traded very often. The French government has said that it will relax the rules, but developers hope they don't relax it too much, because that would lead to a saturated market.
Bouygues...