His question was simple. Where is all the construction happening?

In the capital and across the length of the country, he had passed very few building sites, and almost no new-build.

In a recent article I wrote that France’s construction industry delivers more than three times the economic value of France’s celebrated aerospace industry. So how can an industry that large be hard to see?

A few factors explain the contradiction between French construction’s economic value and its visibility.

Timing: we are in a historic slump

New construction has fallen sharply for three years, on both the residential and the commercial side.

Housing has taken the heaviest hit:

• Housing starts dropped to around 263,000 units in 2024, about a third below the 2019 pre-pandemic level.

• Single-family detached houses, the most visible category of all, fell about 29% to roughly 68,000 starts, the lowest in decades.

• Developers’ new-build home sales collapsed to about 59,000 units, close to half the 2022 figure.

Commercial and industrial building has followed the same curve:

• Non-residential floor space started fell about 11% in 2024, a second straight annual decline after a drop of roughly 15% in 2023.

• Offices and retail led the fall. New retail schemes built from scratch have all but vanished, and office demand is still adjusting to remote working and surplus space.

The construction sector shed roughly 35,000 jobs between 2022 and 2024, with a further 20,000 to 30,000 going in 2025.

The apparent lack of building is partly due to a cyclical trough driven by high interest rates, the end of subsidised buyer schemes, and tighter lending. The cranes are fewer than usual. But a slump in new-build doesn’t mean a slump in construction overall.

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Behind the facades, the less visible sites

Most French building activity is renovation and maintenance rather than new construction: refurbishment and the energy retrofit of the existing building stock.

• New-build fell to 43% of building activity in 2024, its lowest share since the crisis of the late 1990s. In a normal year renovation and maintenance represent the larger share of construction, closer to 53%; the slump has widened a gap that was already there.

• Maintenance and improvement work reached roughly €118 billion in 2024, of which about €31 billion was energy renovation.

• The state retrofit scheme MaPrimeRénov’ funded around 340,800 renovations in 2024 (€3.29 billion in aid), and more than 2.4 million dwellings since 2020.

This is insulation, heat pumps, new windows, kitchens and bathrooms, and the refitting of shop and office interiors. It rarely needs a crane, a hoarding or scaffolding. Walk past a centuries-old facade and the activity, and the value, may be entirely inside.

Commercial property is making the same pivot. After a decade of heavy output that delivered more than 7.5 million m² of new offices in Île-de-France, the new-build pipeline has fallen back to 2016 levels. Developers are pausing schemes and turning to refurbishment.

At La Défense, vacancy has reached around 15%, among the highest on record. Only a couple of new schemes broke ground in 2025, while roughly 250,000 m² in obsolete towers is being restructured for energy and layout upgrades.

Concentration: building where tourists are scarce

What new construction there is clusters in a few regions, and within them on urban edges and former industrial land.

Logistics is the clearest case. France’s stock of large warehouses (those of 10,000 m² and above) has reached around 90 million m². It’s concentrated along the Lille–Paris–Lyon–Marseille corridor and across the north and east, where the four leading regions hold close to 60% of it.

Reindustrialisation, a national priority, drove about 2.74 million m² of construction in 2024, concentrated in the north and the Alpine east: the Dunkirk “battery valley” and the Grenoble–Crolles semiconductor cluster.

Public and collective buildings such as schools, hospitals and sports halls are one of the few growing categories. In Île-de-France they made up 30.5% of permitted new-build in 2024.

These logistics and industrial buildings are located on the edges of urban zones. Public facilities are dispersed across suburbia. They’re rarely on the typical tourist path.

The biggest project is mostly underground

The Grand Paris Express, Europe’s largest infrastructure project, is invisible by design. The €36 billion project in Greater Paris, with 200 km of new metro and 68 stations, is still on site. Most of it is underground: tunnel boring, station boxes, equipment galleries, behind hoardings in suburbs a central-Paris visitor never reaches (Saint-Denis, Champigny, Saclay).

The same holds for public works generally. Roads, rail, water and energy networks are linear, often buried and widely dispersed, not concentrated photogenic sites.

Data centres, the highest-profile commercial build-out in France today, mostly follow that pattern above ground: low, windowless sheds in suburban industrial parks such as Essonne and Marne-la-Vallée, with landscaping designed to keep them discreet.

A conspicuous exception can be found in Marseille, a data centre hub due to the submarine cables landing there. One of the city’s most striking buildings is Digital Realty’s MRS3, a data centre that occupies a former WWII German submarine bunker on the harbour front.

Historic centres, frozen by heritage law

A visitor’s mental map of France is made up primarily of the historic areas where new construction is most tightly constrained. Whole districts in Paris are designated Sites Patrimoniaux Remarquables (Remarkable Heritage Sites). Any construction, demolition or even exterior change within sight of a listed monument requires sign-off from the Architecte des Bâtiments de France (state heritage architect).

In the Instagrammable centres of Paris, Avignon, Aix and Bordeaux, large visible new-build is rare. What construction does occur is small and easy to miss: roof-raising (surélévation), which Paris actively encourages to add homes without taking new land, and reconstruction behind retained facades.

Rural France: two speeds

Outside the metros, the gap between statistics and visible activity widens, and “rural France” is really two different places. New building concentrates on the coasts and around a few dynamic southern and western cities: France’s coasts alone took 1.6 million new homes between 1990 and 2020, about 17% of the national total, built at close to three times the average density.

The interior is the reverse. Across the low-density “empty diagonal” that runs from the Ardennes to the south-west, and through much of the vineyard-and-village country a visitor actually drives through, most of the 35,000-odd communes see only a trickle: a single house or a barn conversion here and there, never a concentrated site.

Policy reinforces this. France’s Zéro Artificialisation Nette (ZAN, “zero net land take”) aims to steer development onto already-urbanised land.

This reduces the edge-of-town building on greenfield sites that a traveller notices from the road. It’s worth noting that the ZAN framework is politically contested: the TRACE bill moving through Parliament would heavily loosen the rigid interim 2031 trajectory and exempt vital social housing, while keeping the 2050 goal.

The direction of travel still favours infill over sprawl. And much rural construction spending is in fact renovation: energy retrofits, second homes, heritage repair.

So he was not wrong

The visitor was reading a real signal. France is building less new housing than at almost any point this century. The country’s construction effort is weighted further to renovation; billions are being invested underground and along transport corridors; and commercial development is focusing on discreet data centres and industrial sites. French construction remains highly active, but it’s not so obvious from a café terrace in the Marais, or the vineyards of a Provençal chateau.

You can see the result in our cities. Fewer building sites. Less new housing.

But France looks different. Browse ArchDaily, Dezeen or Instagram and you’ll see a steady delivery of housing: apartments with well-designed shared spaces, considered façades, some clad in the Lutetian limestone that evokes classic Paris.

France has several tools for planning and land assembly that help keep final prices down.

But there’s another part of the picture. A public financial institution with no real equivalent outside France: the Caisse des Dépôts et Consignations (CDC).

Created in 1816, the CDC is unusual in two ways. Firstly, it answers to Parliament rather than to the government, a deliberate design to keep deposited savings beyond the reach of the Treasury.

Secondly, its reach across the French economy is wide: low-cost lending for infrastructure and housing, financing for hospitals, and substantial equity stakes in some of France’s most recognisable companies, among them La Poste, the public investment bank Bpifrance, and the electricity transmission grid RTE.

So what does a 200-year-old savings institution have to do with housing, and with housing quality? The short answer is the cost and the patience of its money.

Cheap, very long finance lowers the cost of building social and intermediate homes. And capital that holds an asset for decades can absorb the higher upfront cost of quality, better materials, lower carbon, longer-lasting buildings, because it is not trying to sell at a profit in a few years.

The numbers

Start with the wider market. In 2025, around 275,000 homes were started across France. That is a generational low: the figure was over 437,000 as recently as 2017. These starts are overwhelmingly private: owner-occupier houses and developer-built apartments, financed by ordinary mortgages and bank credit.

Separately, in 2025 the State authorised and subsidised about 118,000 new social homes. These aren’t construction starts. They are funding agreements, homes that would appear on site a year or two later.

On social housing, the CDC is close to the whole of the debt. The State’s own figures put its loans at roughly 72 per cent of the housing delivery cost, and over 90 per cent of the borrowing for the build. In 2025 it signed a record 41.7 billion euros of new loans, 22.9 billion of it for social housing.

So the CDC funds almost all the debt behind social housing in France, and social housing is itself a quarter or so of new building. Right now it is a resilient quarter: the private, bank-financed market collapsed far faster than the social one.

Where does the money come from? Unique access to French savings.

Livret A

The CDC manages the centralised share of the Livret A, the tax-free, State-guaranteed savings account held by most French residents, along with its sister product the LDDS. By law, 59.5 per cent of those deposits sit with the CDC. At the end of 2025 the fund held about 453 billion euros.

The cost of that funding tracks the return paid to savers, currently 1.5 per cent. When the Livret A rate rises and the funding gets expensive, the CDC can lend from other resources instead, including the European Investment Bank and the Council of Europe Development Bank.

This is patient capital. The loans run to 40 years, sometimes 80. They are priced by the goals of the project, social or ecological, not by the borrower’s credit standing. So a small social landlord in the Creuse borrows at the same rate as a large one in Paris. It is not money chasing a double-digit return and an exit in five to seven years.

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When the private market stalls

The CDC’s patient capital becomes decisive in a downturn. As private development collapsed from 2023, the State called on the group’s public-interest property company, CDC Habitat: France's largest landlord, which develops, acquires and holds housing at scale.

CDC Habitat committed to buy 17,000 homes off-plan from private promoters, with Action Logement, the employer-funded housing body, committing to up to 30,000 more. CDC Habitat alone placed orders worth around 2 billion euros across dozens of developers, keeping their sites alive. It kept buying, at a tapering rate, through 2024.

Note the division of labour. The lending runs through the Caisse and its Banque des Territoires. The off-plan buying runs through group’s property company, CDC Habitat. Same group, two roles in housing delivery.

The French advantage

Dublin, Amsterdam and Berlin all have institutions that, between them, could do what the CDC does: channel savings into housing, lend long, hold assets, steady the market in a slump. But the functions sit in separate agencies, with separate mandates.

France’s advantage is that these jobs sit in one balance sheet. Guaranteed household savings on one side. Forty-to-eighty-year housing loans on the other. Because that money is household savings, not market borrowing, it does not dry up when markets freeze, so the CDC keeps lending when the banks pull back.

The high-quality apartments that keep appearing in France rest on something quite simple: a regulated savings product, its proceeds lent at decades-long maturities and below-market rates.

In February, Vinci reported the strongest results in its history:

• revenue of €74.6 billion, up 4.2 percent,

• record free cash flow of €7 billion.

In the same month, the French building federation, the Fédération Française du Bâtiment, estimated that French building activity had fallen 4 percent in 2025.

One of the country’s largest builders is thriving while the sector it grew out of is contracting. These contrasting trends tell you where investment in French construction is actually going.

France’s total capital investment

The national accounting measure “Gross Fixed Capital Formation (GFCF)” tracks money committed to durable productive assets. It covers spending on buildings, infrastructure, machinery, and equipment, and construction is one of its largest single components.

For anyone deciding where to build, buy, or lend in France, GFCF is close to a map of where the country is putting its money.

In 2024, GFCF was about 22 percent of French GDP, against roughly 20.5 percent in Germany and an EU average near 21 percent. By that measure, France invests heavily in its productive base, though total investment fell from the previous year

France’s total GFCF fell by about 1.3 percent in 2024 compared with 2023. The level is still high, but the headline conceals a shift in where the money is going within construction.

The split inside construction

In 2024, French building activity fell 6.0 percent in volume, while public works rose about 2.3 percent.

In 2025 the gap narrowed as both halves softened, but the order held: building still fell faster than public works. Building activity fell a further 4.0 percent in volume in 2025, its third consecutive annual decline. New housing was the heaviest casualty, with housing starts ending the year at 283,000 units, well below the long-run average of around 360,000.

Public works held up better in 2025, slipping only about 1 percent in volume as a tightening public budget and the approaching municipal elections finally caught up with it. Housing, in other words, has been the deepest and most persistent weakness, while infrastructure has stayed resilient even as it cooled.

So money is not so much leaving French construction as rotating within it: away from housing, and towards infrastructure and energy.

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Why the shift is happening

Three forces pull in the same direction. The first is demand: higher financing costs and tighter mortgage lending have hollowed out the market for new homes, and developers have responded by building far fewer of them.

The second is regulation, and it falls unevenly. The 2020 environmental building regulation (RE2020) raises the cost and complexity of new homes, leaving roads, rail, and grids outside its scope. Zero Net Artificialisation (ZAN) constrains the consumption of undeveloped land, which bears heavily on new housing. Large national and European infrastructure projects are counted under a separate national land allowance rather than against regional quotas, which softens the same constraint for them.

The third is the structure of finance itself.

France has a deep pipeline of large infrastructure and energy projects, from rail to electrical grid reinforcement to new nuclear build. These projects suit patient capital. Pension funds, insurers, and sovereign investors will wait years for a stable return, and concession structures give them exactly that: a contracted income that runs for decades.

New housing has no equivalent, depending instead on private buyers and short-term lending, both of which have dried up. The result is a financing system that channels capital towards the motorway and the metro line, and away from the apartment block.

Vinci as the mirror

To see this focus on infrastructure expressed in a single balance sheet, look at Vinci. The French construction company employs 294,000 people in more than 120 countries. It operates across three segments: construction, concessions, and energy.

Vinci’s record results in 2025 did not come from building homes. They came from concessions and energy solutions. It’s motorway network and 72 airports generated around €12 billion globally, at high margins, up 5 percent on the year. Vinci’s energy solutions grew 8 percent to €30 billion.

The company’s construction arm, by contrast, grew just 1.1 percent between 2024 and 2025. Its property development business, VINCI Immobilier, which builds homes in France, saw revenue fall 3 percent and reservations drop 13 percent to just over 4,000 units. The one part of Vinci most exposed to French housing tracked the national slump almost exactly.

Vinci’s internal balance is a scale model of France’s construction economy: weak domestic residential, resilient infrastructure and energy, and growth found increasingly abroad. The firm’s capital allocation is a considered bet on where durable returns sit, and that bet is concessions, energy, and international infrastructure. Vinci’s approach reflects what the GFCF figures show: the segments that are easiest to finance are attracting investment, and housing is not in that category.

What this means for capital

This leaves French construction with an awkward imbalance. France has a recognised housing shortage and an explicit policy interest in dense, connected, liveable places. Yet the financing system rewards the motorway, the airport, and the grid connection over the apartment block. Those assets generate the long, predictable income that institutional capital wants. Housing, structured the way it currently is, cannot compete for the same money.

For anyone allocating capital or weighing a move into the French construction market, the lesson is to read the sector by segment rather than by overall trends. We’ve seen that French building activity fell 6.0 percent in 2024 and a further 4.0 percent in 2025, even as overall capital investment slipped only modestly. But underneath that figure sits a divergence between residential work that is starved of finance and infrastructure that still commands it.

The firms thriving today, Vinci chief among them, are those sitting on the right side of that divide. The figures reward a close look at where the money goes, not just how much of it there is.

Most existing capacity is concentrated in two places: Paris, and Marseille, the landing point for submarine cables linking Europe to Africa, the Middle East and Asia. Digital Realty’s MRS3 data centre opened its first phase in Marseille in June 2020, housed in a former WWII submarine base in the port. The €140 million conversion delivered a 16.5 MW facility across roughly 7,100 m² of server space.

MRS3 has not been universally welcomed. In their book Les Assoiffeurs (The Thirsty Ones), Fabien Benoit and Nicolas Celnik document local and environmental opposition to water-hungry projects across several sectors, data centres among them. In the case of MRS3, they recounted objections to use of scarce drinking water for cooling, as well as concerns about marine biodiversity from discharging warmed water into the sea.

Digital Realty’s latest data centre near Marseille, MRS6, has also drawn sharp opposition, but received its building permit earlier this year. At an estimated cost of €700 million, MRS6 is to be built on the site of a former Decathlon logistics warehouse at Bouc-Bel-Air, about 20 km north of Marseille. At roughly 20,000 m² of server space, it is significantly larger than the firm’s sites in Marseille.

A dedicated opposition website, nondatacenterboucbelair.fr, sets out the range of objections to MRS6: fire risk, water consumption, and visual and environmental impact.

Campaigners, including France Nature Environnement, argue the centre would draw around 80 MW, which they compare to the electricity consumption of a town of 117,000 people, and point to the strain of concentrating so much demand in a region that already hosts five Digital Realty centres.

Digital Realty, for its part, maintains that its centres neither pollute nor generate noise, that the MRS6 site sits within an existing activity zone, and that the facility is essential to French digital sovereignty.

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The state’s legal levers

France has tools to push priority projects through the permitting process. At local level, a projet d’intérêt général (PIG, declaration of general public interest) can shift planning decisions from the commune to the state.

For projects deemed strategic, a stronger mechanism exists. The loi Industrie Verte of October 2023 created the status of projet d’intérêt national majeur (PINM, major national interest project).

A 2025 simplification law extended this status to data centres. Once a project is designated by government decree, planning permits are issued at prefect level, urban-planning documents can be brought into line on an accelerated timetable, electricity connection is prioritised, and the decree can grant derogations, including from rules protecting endangered species.

PINM projects remain subject to public consultation and can be challenged in court. So far, those challenges have failed.

The Conseil constitutionnel upheld a species-derogation provision in March 2025, and the Conseil d’État has since rejected appeals against PINM decrees, in cases concerning a lithium project and a plastics-recycling plant. The courts have made clear they apply only limited scrutiny to the government’s reasons for granting the status.

Stepping up the roll-out

The data centre pipeline is now substantial. Campus IA is a 1.4 GW data centre campus planned for Fouju, a village of around 600 people about 45 km south-east of Paris. It is backed by the Emirati fund MGX, Nvidia, Mistral AI and the French public investment bank Bpifrance. The project was first announced at the May 2025 Choose France summit for foreign investment into France.

Campus IA as planned would cover roughly 73 hectares of built area across ten to twelve buildings. If completed, it would be the largest AI campus in Europe. Objections centre on the loss of agricultural land and the scale of electricity demand: at full power, 1.4 GW is comparable to the output of a nuclear reactor. The project has been through a national public-debate process and is now advancing.

The largest data centre investment for France came at the 2026 Choose France summit, held at Versailles last week. Japan’s SoftBank announced plans to invest up to €75 billion to develop 5 GW of AI data centre capacity in the country. The initial commitment is €45 billion for 3.1 GW in the northern Hauts-de-France region by 2031, across three sites: Dunkirk, Bosquel and Bouchain. The further €30 billion is conditional on the first phase succeeding.

The trajectory for data centre construction in France is consistent and growing.

France is offering foreign capital its decarbonised grid, land (industrial and agricultural alike) and a legal framework built to clear obstacles fast. The tension between local objections, environmental concerns and national priorities has not been resolved. From an investment and construction point of view, the clear political will and ‘major national interest’ permitting is underpinning growth.

How does France deliver public goods on this scale? The key to their success is setting up a dedicated public delivery company, to focus efforts and accountability. For the Grand Paris Express, the Société du Grand Paris (Greater Paris Company) was created in 2010.

Just as important are the tools at the delivery company’s disposal, especially for land assembly. The Société du Grand Paris was able to draw on several methods: land banking, agreed purchase, easements, right of substitution, and compulsory purchase.

Five core mechanisms for land assembly

Land banking

Public land agencies are created to acquire and hold property in anticipation of future infrastructure projects. Early public land assembly allows the state to capture land value increase generated by transport improvements. They might buy and hold property for a decade, covering debt costs with continued operation. The Paris region has a public land agency, Établissement public foncier Île-de-France (EPFIF). It works alongside the Grand Paris Express, banking land in station area perimeters for housing and redevelopment.

Public utility easements

For works more than 15 metres below ground, a servitude d’utilité publique (public utility easement) avoids the need to acquire land. The easement is formed by a public order, following a parcel-level enquiry, and is a limitation of the owner’s right to use or develop their property. Property owners are compensated based on a fraction of the surface land value according to depth - roughly 6 to 8 percent of surface value at 15 to 20 metres, falling to 2 to 3 percent at 30 to 40 metres, with further reductions for water table position and other factors.

Pre-emptive right to purchase

What happens if the owner of a property in the zone of an infrastructure project puts the property on the market? Before the contract is signed, the public authority can exercise a droit de préemption (right of substitution) and step into the role of buyer. Not great for the buyer who has lost out on a purchase despite their efforts. But it does ensure that a development company like Grand Paris Express has first refusal on property in the path of significant infrastructure projects.

Compulsory purchase

By issuing a déclaration d’utilité publique — declaration of public utility — the State can certify that a project is of sufficient public interest to justify compulsory acquisition of private property. The expropriation process begins with an administrative phase including an independant enquiry, environmental assessment for larger projects, and parcel-level assessment. These steps are followed by a judicial phase where a judge issues an expropriation order and, if not already agreed, sets the property owner’s compensation.

Acquisition à l’amiable

Acquisition à l’amiable — negotiated, voluntary purchase — is the baseline for all French land assembly. Any public or private body with a mandate to acquire land may approach owners directly. There is no statutory obligation to attempt negotiated purchase before invoking pre-emption or compulsory purchase, but it is common practice and is often cheaper and faster. Price is typically informed by valuation data from France Domaine.

Benefits

With land banking, the public purse, through land agencies, captures the initial uplift in value, at an early stage in the development of an infrastructure project. This ultimately reduces the cost of delivering transport and utility projects.

Public utility easements are an administrative procedure, not requiring any legal process (unless the property owner objects on legal grounds). It is an administrative process on foot of an order from the Prefect - the national government’s regional representative. While the owner may object, whether on grounds of compensation or impact of the works, the process requires no change of property title.

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How this differs from other countries

In Britain, Ireland, and most of North America, planning consent and compulsory acquisition are bundled into a single decision: a Development Consent Order in the UK, a Railway Order in Ireland. The infrastructure client cannot assemble land until that decision is granted, and cannot break ground until any judicial review is resolved.

The French system does not eliminate the risks around permitting. But it does separate these from the land assembly risks. French land agencies, with patient capital, can bank land long before authorities issue permits or make declarations of public utility.

Legal challenges

There is still friction in French land assembly. In practice, a court may be hearing legal challenges related to one part of a line while contractors have already broken ground on another section.

An example from the Grand Paris Express: in June 2025, the Tribunal Administratif de Montreuil annulled the transfer order (arrêté de cessibilité) for two parcels on the future Ligne 15 Est. The houses had already been demolished. The Société des Grands Projets (the Société du Grand Paris renamed as of 2023) is appealing.

In their book Les naufragés du Grand Paris Express (The Shipwrecked of the Grand Paris Express), Anne Clerval and Laura Wojcik capture some of the local dissatisfaction with the transport and urban regeneration project.

The book gives the perspective of small business owners, tenants and homeowners uprooted to make way for new stations. Readers get an insight into communication delays, lack of accountability due to delivery company outsourcing, and mistrust regarding the company’s approach to negotiation and compensation.

There’s no doubt that many business owners and residents are disrupted when building 200km of metro line and 68 stations. Nonetheless, from the point of view of getting infrastructure built, the six land assembly mechanisms outlined here are at the root of what’s impressive about the French approach: delivery is fast while design quality, and build quality, are not just maintained, they’re excellent. All while complying with demanding procurement and environmental rules.

This excellence, in quality and time-to-completion have a lot to do with the land assembly toolkit available to French public agencies and delivery companies. At the early stages, public land value capture drives savings that can fund build quality. Later on, tools like public utility easements and pre-emptive right to purchase provide spare a lot of time and legal costs.

Urban transformations like Clichy-Batignolles are delivered by creating Zone d’Aménagement Concerté (ZAC), a Coordinated Development Zone. The ZAC is a mechanism in French planning law, the Code de l’urbanisme.

How the mechanism actually works

A ZAC is created by a municipal authority, sometimes the state. It maps a defined perimeter that the authority wants to develop or redevelop. Early stages involve a study and public consultation, an environmental assessment, and setting out the project’s objectives and programme.

The public authority appoints an aménageur, or master developer, to assemble land, deliver primary infrastructure, and sell serviced plots. The master developer role can be filled by the municipal authority itself, by a publicly-owned or joint public-private company, or by a private operator under a development concession.

Every ZAC is governed by a multi-year development scheme budget, the bilan d’aménagement. It’s the master developer’s budget, balancing revenue and expenditure across the life of the operation. Accountability to the municipality is based on annual reporting.

Land assembly

Crucially, the aménageur is equipped with real powers to assemble land. Inside a ZAC perimeter, it can use préemption to acquire sites as they come up for sale. Alternatively, compulsory purchase can be pursued on the basis of a declaration of public utility.

This is how whole neighbourhoods like Clichy-Batignolles go from idea to completion in 15-20 years. The aménageur is not negotiating with hundreds of landowners one by one over decades.

The financial logic

Once land is assembled, the aménageur carries out the heavy lifting: demolition, depollution, archaeological investigation, and the primary infrastructure for serviced building plots. It then sells those plots to private developers, who build housing, offices, retail, or whatever the programme calls for.

The master developer’s revenue comes mainly from land sales and from public works contributions from private developers. Expenditure covers land acquisition, works, studies, and overheads.

What this structure does, in commercial terms, is capture the uplift between pre-development land value and serviced land value, and use it to pre-pay the public realm, the social housing, and the infrastructure. The private developer then builds on a serviced plot at full market rate. The affordability and the public goods are not squeezed out of the developer’s margin; they are funded upstream by the value the assembly process itself has created.

The Anglo contrast

In the Anglosphere, it’s usually developers who take the lead in land assembly and real estate development, capturing most of the value along the way. They also bear risks linked to archaeological finds and contamination. In the French model, the public authority captures the land value uplift. And by the time a private developer is bidding on a plot inside a ZAC, the riskiest below-ground work is done.

The private developer’s role inside a ZAC is not diminished, it’s just different. They’re not the patient land assembler taking decade-long bets on consents and contamination. The private developer skills that matter in a ZAC are not land-banking and planning risk management, they’re design quality, delivery credibility, and the ability to work inside a public-led framework.

Acting in concert

In a Zone d’Aménagement Concerté, the concertation part is key. It is a specific public consultation duty under French planning law, which starts before a coordinated development zone is established, and continues throughout the operation.

In practice, it means structured engagement with residents, business associations, and other affected parties, alongside cooperation between the municipality and the private sector.

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ZACs in Paris and Lyon

Clichy-Batignolles is one example of a coordinated development zone. For a larger-scale example, check out Lyon Confluence - the regeneration of a former industrial and transport peninsula at the meeting of the Rhône and Saône rivers.

Paris-Saclay, the project to build out a science and technology cluster on the plateau south-west of Paris, combines several ZACs. The mechanism scales from neighbourhood redevelopment to strategic infrastructure projects.

The park, the courthouse, the schools, and the apartments at Clichy-Batignolles were not the product of a developer making the right bet on a freight yard. They were the product of a planning mechanism that lets the city take the lead as land assembler, primary investor, and orchestrator. The city carries out enabling works, then sells serviced sites to private developers to build on.

If you’re following French construction and urban development, the ZAC mechanism is the key to understanding how development and regeneration is planned and delivered. It shapes who assembles the land, who carries the early risk, and how affordability is funded through value capture.

Once you understand ZACs, much of what looks unique about the French development market starts to make sense.

France finally passed a national budget in February, after months of deadlock. Municipal elections took place in March. And from outside France, three external shocks landed: the fallout from US tariffs, conflict in the Middle East, and the higher energy prices it brought.

Here’s where the forecast stands at the end of May.

Three things that went more or less as expected

• Offices. CBRE expected empty office space to keep building up, and it has. Available space in the Paris region is up about 9% on a year ago, with roughly one square metre in ten sitting vacant. Demand for new offices remains thin.

• Hotels. After a record 2025, CBRE expected a calmer year, and that’s what we’ve seen. Occupancy softened in the first quarter, though room rates held up and Paris stayed resilient.

• Green building regulations. CBRE expected environmental standards to stay central even as Brussels eased some company reporting duties. They have. France’s tighter carbon limits for new buildings took effect on schedule; a building’s energy performance still shapes what tenants and investors will pay for it.

Three things that went in the wrong direction

• Economic growth. CBRE forecast about 1% for the year, but the economy was flat in the first quarter. That owed more to a fall in construction and the local election cycle than to events abroad. However, the rise of inflation to 2.2% in April was linked to oil price increases, and to shipping disruption in the Strait of Hormuz. That has push up the cost of energy-intensive building materials, such as glass, steel and ceramics.

• Investment dried up. Money going into French commercial property fell to its lowest first quarter in ten years, down roughly half on a year earlier. Logistics warehouses were hit hardest. CBRE had expected a slow recovery, not a fresh slump.

• New-build sales keep falling. The hoped-for new-build housing rebound hasn’t happened. Sales of new homes fell over 14% in the first quarter, and bulk sales to social landlords, a figure CBRE watched closely, dropped by a third.

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Three things to be positive about

• The budget. The single biggest uncertainty CBRE flagged, an unresolved national budget, is now behind us. It passed in February. The process was messy, but the question mark has gone.

• Refurbishment continues. Across almost every sector, new building is quiet while renovation and reuse are picking up. For anyone in design, engineering or building products, that’s where the steady demand now sits.

• Office-to-home conversion. With so much empty office space, converting it into housing is finally getting real support: the state is backing 61 conversion projects in the Paris region. Delivery is still slow, but the legal groundwork is now in place.

In short

CBRE read the fundamental trends well: weak demand, oversupplied offices, a flight to quality, and a shift towards reuse over new-build.

What no January forecast could fully price in were the external shocks: the conflict in the Middle East drove inflation up and froze investment. However, the flat first quarter owed more to home-grown factors: a fall in construction, the election cycle and a mild winter.

The direction CBRE described still holds, but the timing has slipped. We may have to wait until 2027 for growth and investment to turn back up.

One industry gets far less attention in the national press, but generates over three times the revenue: construction. The French building federation (the Fédération Française du Bâtiment) reported that revenue in French building construction was €208 billion in 2024.

The separate federation for public works construction, the Fédération Nationale des Travaux Publics, reported 2024 output at €51.3 billion. Even allowing for overlap between the two federations’ figures, it’s clear that French construction is a primary contributor to France’s economy.

While federation figures cover construction industry revenue, Insee’s national accounts measure from the investment side: at €291.7 billion, investment in construction represented 11% of French GDP in 2024.

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French construction investment returned to growth from the second quarter of 2025, ending two years of contraction. Entering 2026 with a carry-over growth rate of +0.7%, the sector’s recovery has been led by private households and commercial investment, supported by a strong pipeline of permits and starts.

Public investment in construction was lower going into 2026, but that was to be expected given municipal elections in March this year. And Insee’s survey of public works contractors in April this year confirmed continued caution in the public works sector.

France's aerospace industry will always attract the headlines. But for those tracking where capital actually moves in the French economy, construction is the larger story, and it entered 2026 in a positive direction.

This map is a great orientation to France’s most populous and economically vibrant regions. It shows the size of the main cities, the extent of their economic hinterlands, and their populations.

The map is from Insee, France’s National Institute of Statistics and Economic Studies. The heavier the colours, the greater the population. Paris is clearly the lead city. Below you have a snapshot of the other main cities with populations over a million.

Lyon - in the Auvergne‑Rhône‑Alpes region on the Swiss border - built its prosperity on silk manufacturing, trade and finance, and a diversified industrial base. It’s now one of France’s main centres for chemicals, pharmaceuticals and life sciences. Alongside that are growing digital, engineering and clean‑technology activities.

The Marseille–Aix-en-Provence agglomeration - in the Provence‑Alpes‑Côte d’Azur region on the Mediterranean coast - grew on the strength of its role as a major commercial and maritime port. The city-region’s contemporary economy is driven by port logistics and energy, digital infrastructure linked to subsea cables, as well as a large trade and services base. In addition, the region has a strong tourism industry and a diversified university and research sector.

Lille - close to the Belgian border - industrialised around textiles, coal mining and metalworking. Following deindustrialisation in the late 20th century, the city has since reoriented toward services, including transport, business and public administration. Lille hosts major retail and e‑commerce groups and a growing digital and innovation ecosystem.

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Toulouse is the capital of the central Occitanie region that stretches down to the Mediterranean. Originally a regional commercial centre built on woad* trading and agriculture, the city has evolved into France’s principal aeronautics and space hub. Today its economy is anchored in aircraft and satellite manufacturing and engineering, supported by a dense network of research institutions, universities and high‑tech services.

(* a source of blue dye)

Bordeaux - capital of the south-east Nouvelle‑Aquitaine region facing the Atlantic - developed as a major wine‑exporting and maritime port city in the 18th century. As part of the Aerospace Valley, aeronautics is now a key part of Bordeaux’s economy, while the global wine and agri-food sectors retain an important role. The city also benefits from a growing digital and creative scene, tourism, and university‑driven research.

Nantes - in the Pays de la Loire region - grew as an Atlantic port and shipbuilding centre, with maritime trade underpinning its industrialisation. In recent decades, the metropolitan economy has shifted toward services such as in the digital and creative sectors. The city also hosts advanced manufacturing including aeronautics. Port activities retain their importance, while marine renewable energy has emerged as a strategic specialisation for Nantes and the wider estuary area.

This is necessarily a high-level overview. In French construction, the interesting stories are where policy developments, design preferences and economic reality meet. That’s what The French Build will continue to cover across France's major regional cities and beyond.