Key office figures and insights for the Greater Paris Region
Investment market activity recovers while the rebound on the leasing market is slow to come
The much-anticipated recovery that was expected to be seen in in the rental market in September failed to materialise and Q3 was no more active than Q2 with 246,000 sq m of take-up; this took the year-to date figure to 913,200 sq m by the end of September.
The level of immediate supply across the Greater Paris Region has been rising since the end of 2019 and now stands at 3.3 million sq m (+21% over the last 9 months), representing a regional vacancy rate of 6.1%.
The COVID-19 epidemic has not yet had an impact on prime rental values. In the Paris CBD, our calculations for the prime rent (10% of the highest transaction values over the last 12 months, across all office types) reveal a further increase over Q3 to €900 per sq m/year.
By the end of September, the year-to-date investment volume for the Greater Paris Region reached €11.6 billion; this represents a -31% decrease compared with the record level seen in 2019.
Lower volumes were seen across all segments, apart from the €100 - €300 million segment which remained stable year on year with €3.4 billion in investments over the Q1-Q3 period.
With €9.4 billion in investments by the end of September, office assets remained firmly in the majority (83%).
French investors dominated the market with a record 74% by volume; this year-on-year increase was particularly due to the lack of Asian investors who accounted for 11% of investments in 2019 as well as the withdrawal of foreign investors due to the COVID-19 epidemic.