Office Rental Market - April 2019

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Take-up decreased at the end of 2018, and continued through the start of this year.
 

Q1 2019 take-up totalled 541,000 sqm, a decrease of 23% compared with Q1 2018.
 

It is important to remember that Q1 2018 was truly exceptional, with the highest take-up in 10 years.
 

Q1 2019 take-up has decreased as transactions in excess of 10,000 sqm have become scarce (decreased by 66% on average).
 

This is due to a scarcity of vacant space, particularly in Paris, compounded by occupiers' lack of confidence which restricts pre-letting.
 

Average rent continued to increase in Paris CBD to €719/sqm. Incentives decreased overall throughout the greater Paris region. However, there is a major contrast between size segments: over the past few years, there has been a significant decrease for surface areas of less than 5,000 sqm (17.4% at Q4 2018 versus 19.3% at Q3); inversely, rent has increased for surfaces of more than 5,000 sqm (22.1% at Q4 2018 versus 21.7% at Q3).

 

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Take-up decreased at the end of 2018, and continued through the start of this year. Q1 2019 take-up totalled 541,000 sqm, a decrease of 23% compared with Q1 2018.

Géraldine LATHAM

Key figures April 2019

Take-up in Île-de-France region per quarter ​

Source : MBE Conseil according to Immostat

Take-up in Île-de-France region per quarter  ​

  • Take-up decreased at the end of 2018, and continued through the start of this year;
     
  • Take-up for Q12019 totalled 541,000 sqm, i.e., a decrease of 23% compared with Q1 2018, which was particularly active;
     
  • However these figures are consistent with the ten year average.

Take-up in Île-de-France region by size

Source: MBE Conseil

Take-up in Île-de-France region by size

  • Take-up has decreased as transactions in excess of 10,000 sqm have become scarce;
     
  • The small and medium surface segment continued to grow by +2%; again, there is a marked difference between segments, as transactions for surfaces of 1,0005,000 sqm increased by 17% whereas those for surfaces of 0-1,000 sqm decreased by 10%.

Take-up in Île-de-France region by geographic area

Source: MBE Conseil according to Immostat

Take-up in Île-de-France region by geographic area

  • Clear slowdown in take-up in Paris;
     
  • However, the CBD has proven resilient, as the decrease was limited to 4%;
     
  • The Western CBD (excluding La Défense) recorded a 30% decrease in take-up at the end of 2018, but experienced an exceptional increase (+83%) at the start of this year thanks to 3 transactions of more than 5,000 sqm;
     
  • Despite the general decrease in take-up, two other areas have recorded an increase: the outer rim, thanks to the 31,000 sqm transaction for the SAKURA building leased by SOCIETE GENERALE; and the emerging Northern hub, although transaction volumes remain low.

Vacancy rate in Île-de-France

Source: MBE Conseil according to Immostat

Vacancy rate in Île-de-France

  • Vacancy rates remain stable compared with Q4 2018;
     
  • In Paris, the CBD vacancy rate remains stable at 1.7%, whereas in peripheral business districts the rate has dropped to 3%;
     
  • The low 4.8% vacancy rate recorded in La Défense may only be temporary, and the vacancy rate could grow in the 2nd quarter should take-up remain sluggish.

Evolution of average weighted rental values for new buildings

Source: MBE Conseil

Evolution of average weighted rental values for new buildings

  • Average rent for new buildings continued to increase in the CBD to €719;
     
  • The quarter's highest rent was €840: the WEWORK transaction in GCI's 5 Rue des Italiens;
     
  • Average rent in the Western CBD dropped to €465 as there were no transactions for new space in La Défense, and large surface area transactions in Boulogne were predominantly for secondhand buildings;
     
  • Rent in suburban areas dropped, particularly as a result of the €270/sqm rent for the 31,000 sqm SAKURA building.

Selected major transactions over 5,000 sq.m in Q1 2019

Significant transactions for spaces - Avril 2019
DATETENANT/PURCHASERLETTING/TRANSACTIONSPACE (sq. m)PRICE € / sq. mADDRESSLOCATIONCONDITION
Q1 2019SOCIÉTÉ GÉNÉRALEL30866270SakuraFONTENAY SOUS BOISNEW
Q1 2019EDFL22544330FlowMONTROUGENEW
Q1 2019ALTENL11866OxalisBOULOGNE-BILLANCOURTSECOND HAND
Q1 2019LABORATOIRES ROCHEL11043L'angleBOULOGNE-BILLANCOURTSECOND HAND
Q1 2019GEFCOL10450450SenseLA DEFENSENEW
Q1 2019DIGITAL SERVICESL9876KonnectSAINT-OUENNEW
Q1 2019VINCIL9832410In DéfenseNANTERRENEW
Q1 2019WE WORKL7460840Opéra ItaliensPARIS 09NEW
Q1 2019ORDRE DES EXPERTS COMPTABLES - COMMISSAIRES AUX COMPTESL6482493Le JourPARIS 14NEW
Q1 2019KWERKL6403750Kwerk Saint HonoréPARIS 08NEW
Q1 2019AIR FRANCEL6300BaïkalROISSYNEW
Q1 2019EDENREDL5700440Be IssyISSY LES MOULINEAUXNEW
Q1 2019RATPL5375Le ShamrockMARNE LA VALLEESECOND HAND
Q1 2019DEEZERL505926 rue de CalaisPARIS 09SECOND HAND
Q1 2019FM GLOBALL5008530Coeur DéfenseLA DEFENSESECOND HAND
Source: MBE Conseil

Selected major transactions over 5,000 sq.m in Q1 2019