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- The leasing market is proving resilient despite the recent economic and financial uncertainty.
- Available supply is slightly down and the share of new properties continues to gradually abate.
- Outside the CBD, the general trend is towards stability in "prime" rental values.
- Investment market activity is at the same exact level as last year.
- The highlight of the first quarter was the completion of six off-plan transactions.
- Prime yields remained stable across all sectors
Following the euro and sovereign debt crisis which plunged Europe into turmoil at the end of 2011, a number of players were expecting a disappointing first quarter. Yet that was not the case.The leasing market followed the trend of Q4 2011 with nearly 515,000 sq m leased in the first three months of the year.No major contrast compared to the fourth quarterThe fact that overall volumes marketed have fallen by 18% in a year can be explained by the very large transactions recorded in 2011, including the 80,000 sq m for THALES in Gennevilliers. Apart from this transaction, the variation between Q1 2011 and Q2 2012 was just 6%.Furthermore, if we analyse the performance at the start of the year compared with the fourth quarter, take-up is comparable, whereas a slowdown in rental activity could have been expected given the troubled economic situation over the winter. Over the last five years companies have somewhat adapted to these conditions and have already made the necessary readjustments.Market boosted by large transactionsIn terms of market structure, the segment of transactions exceeding 5,000 sq m was active and is the only one to have improved (14% increase in the number of transactions) compared with the same period the previous year. All other surface categories were down, particularly intermediary surface areas (1,000-5,000 sq m).This difference in behaviour between large companies and SMEs can be explained on several levels: Access to international growth levers and managerial motivation on the real-estate decision-making process from large companies compared with a probably more economically driven approach by SMEs which are highly exposed to the purely national financial woes. This trend may remain short-lived, however, since expressed demand is showing signs of increasing again across all surface area categories.
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24 April 2012