Office Rental Market - April 2017

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The dynamism seen in 2016 has continued through the beginning of 2017 in the Île-de-France office market. With 664,000 sqm having been commercialized, Q1 2017 has seen the best first-quarter performance in a decade.

 

This 27% increase compared to the first quarter of 2016 is due to a rise in the number of large transactions, in particular to the 86,000 sqm "mega transaction" in the Tours Duo, leased by Natixis.

 

The overall vacancy rate in the Île-de-France region has remained stable at 6.3%. Paris continues to post a vacancy rate of 3.4%, still below the average over the last ten years.

 

But one should also consider the high volume of deliveries of buildings that will occur over 2017, which could have an impact on Paris supply volumes.

 

Average rents for new buildings have increased in the Paris CBD to €685 / sqm, while those in the West CBD have declined sharply (€460 / sqm vs. €510 / sqm at the end of 2016) in the absence of transactions within La Défense.

 

Average rents for second-hand buildings have shown contrasting trends: a drop in the Paris CBD, but an increase in the secondary business districts.

 

Our vision of the office rental market
The view of Géraldine LATHAM

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The dynamism seen in 2016 has continued through the beginning of 2017 in the Île-de-France office market. With 664,000 sqm having been commercialized, Q1 2017 has seen the best first-quarter performance in a decade.

Géraldine LATHAM

Key figures April 2017

Take-up activity in Île-de-France by quarter ​

Source : MBE Conseil according to Immostat

Take-up activity in Île-de-France by quarter ​

  • First-quarter take-up has reached 664,000 sqm : +27% over Q1 2016 ;
  • This represents the best first-quarter performance in ten years.

Take-up in Île-de-France by size 

Source : MBE Conseil according to CBRE

Take-up in Île-de-France by size 

  • Stable take-up volume in the under 5,000 sqm market has been offset by a significant increase in take-up of surfaces over 5,000 sqm (+ 27%), to 323,000 sqm. Most dynamism in over 10,000 sqm range (+166%), due especially to the mega transaction of Natixis in the Tours Duo (86,000 sqm);
  • However, a significant decrease (-42%) in transactions between 5,000 and 10,000 sqm.

Île-de-France take-up by location

Source : MBE Conseil according to CBRE

Île-de-France take-up by location

  • Increase in Paris achieved thanks to the exceptional take-up levels in the secondary business districts;
  • But there has been a slowdown in the Paris CBD and in the other Paris submarkets;
  • Lower take-up in La Défense, but good momentum in the rest of the West CBD, thanks to three large transactions concluded in Boulogne;
  • Strong increase (+54%) in the suburbs, due to activity in the PériDéfense area, (in particular to the Groupama deal in Nanterre), as well as in the Emerging North, thanks to the Région IDF agreement in Saint-Ouen.

 

Île-de-France vacancy rates

Source : MBE Conseil according to Immostat

Île-de-France vacancy rates

  • Slight rise within Paris
  • Overall stability in suburbs

Weighted average rental values for new buildings

Source : MBE Conseil

Weighted average rental values for new buildings

  • Increase in rental averages for new buildings in the Paris CBD;
  • Averages decrease for new buildings the West CBD, due mainly to the absence of transactions involving new buildings in La Défense in Q1 2017;
  • Stability in the suburbs, but with a widening gap between average values for large-space transactions in the inner suburbs (i.e., Saint Ouen and Nanterre at €360 / sqm) and in the outer suburbs (average €200 / sqm).

Selected major transactions over 5,000 sq.m in Q1 2017​

Significant transactions for spaces- Avril 2017
DATETENANT/PURCHASERLETTING/TRANSACTIONSPACE (sq. m)PRICE € / sq. mADDRESSLOCATIONCONDITION
Q1 2017NATIXISL89 650530Tours Duo PARIS 13New
Q1 2017REGION ILE DE FRANCEL33 015360Influence 1SAINT OUENSecond hand
Q1 2017CREDIT AGRICOLE ASSURANCET25 000n/a44 rue de VaugirardPARIS 15New
Q1 2017GROUPAMAL18 025362West ParkNANTERRENew
Q1 2017ORANGE BUSINESS SERVICESL17 545530Cœur Défense Tour BLA DÉFENSE Second hand
Q1 2017LES EDITIONS AMAURYT15 649n/aQuai OuestBOULOGNE-BILLANCOURTSecond hand
Q1 2017Preneur confidentielT15 600n/aPARIS 15Second hand
Q1 2017GROUPAMAL13 971340Crystal DéfenseNANTERRESecond hand
Q1 2017FAURECIAL13 000n/a17-21 Champs PierreuxNANTERRE New
Q1 2017GROUPAMAL11 460290Défense 4/5/6NANTERRESecond hand
Q1 2017RENAULTL10 998460Le CristallinBOULOGNE-BILLANCOURTNew
Q1 2017BNP SIGL10 919315Le ValmyMONTREUILSecond hand
Q1 2017URSSAFL8 490n/a37 rue de CambraiPARIS 19New
Q1 2017RENAULTL7 56861015 rue d' UzèsPARIS 02New
Q1 2017HUAWEI TECHNOLOGIES EUROPEL7 162430Arcs de SeineBOULOGNE-BILLANCOURTSecond hand
Q1 2017LOCAPOSTEL7 162n/aAphélionISSY LES MOULINEAUXSecond hand
Q1 2017WE WORKL6 219550Cœur MaraisPARIS 03New
Q1 2017AEW EUROPEL6 204750Capital 8PARIS 08Second hand
Q1 2017FNAC DARTYL5 661n/aOptimaIVRY SUR SEINENew
Source : Immostat

Selected major transactions over 5,000 sq.m in Q1 2017​