Office Rental Market - July 2017

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After a particularly active 1st quarter with a take-up of 660,000sqm (including 90,000sqm leased to NATIXIS in the DUO towers), the 2nd quarter showed a downturn in rentals, and transactions of more than 5,000sqm were particularly scarce.

 

Only 9 leases for more than 5,000sqm were signed: this was one of the slowest 2nd quarters since 2001.

 

Nevertheless, thanks to the 1st quarter's activity, take-up has shown a +4% increase compared with the 1st semester 2016, totalling 1,164,600sqm.

 

In Paris, the vacancy rate is extremely low at 3%.

 

The scarcity of available properties in Paris, particularly in the CBD, does not allow for market fluidity; demand has decreased by 7%.

 

Rent values for new buildings in this area have increased to €669/sqm as a result of the rise of over-bidding due to this scarcity.

 

Activity remains strong in the Western business district (excluding La Défense) which has shown a +43% increase in transactions, thanks to CAP GEMINI's 33,000sqm lease in the AQUAREL building located in Issy-les-Moulineaux.

 

This is also true for surrounding areas (excluding business districts), where leasing activity at the end of the 1st semester 2017 has been dynamic, thanks to large transactions concluded in the 1st quarter in areas surrounding La Défense and in Saint-Ouen. 

 

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

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After a particularly active 1st quarter with a take-up of 660,000sqm (including 90,000sqm leased to NATIXIS in the DUO towers), the 2nd quarter showed a downturn in rentals, and transactions of more than 5,000sqm were particularly scarce.

Géraldine LATHAM

Key figures July 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 ​

  • Take-up in the 2nd quarter 2017 has decreased compared with the 2nd quarter of the previous year;
  • However 1st quarter performance has made it possible to register increased activity (+4%) at the end of the 1st semester 2017 with a take-up of 1,164,600sqm (versus 1.12 million by mid-2016).

Take-up in Île-de-France by size 

Source : MBE Conseil according to CBRE

Take-up in Île-de-France by size 

  • Spectacular decrease in the number of large transactions: -42% in the 2nd quarter.
  • This has been one of the slowest 2nd quarters since 2001, with only 9 leases for more than 5,000sqm in the 2Q, for a take-up of 110,870sqm.
  • Leases for surface areas of less than 5,000sqm have remained stable.

Île-de-France take-up by location

Source : MBE Conseil according to CBRE

Île-de-France take-up by location

  • Leasing has continued to slow in Paris (-7%), except in key business districts which remain ahead of the game, notably thanks to the DUO towers lease signed in the 1st quarter 2017.
  • The western CBD (excluding La Défense) has shown a 43% increase in take-up thanks to CAP GEMINI's lease in the AQUAREL building located in Issy-les-Moulineaux. La Défense however has seen its take-up halve due to the lack of new properties available.
  • The outer suburbs, excluding business districts, have performed very well, thanks to leases signed concluded in the 1st quarter: GROUPAMA in Nanterre, and the REGION ILE-DE-FRANCE in Saint-Ouen.

 

Île-de-France vacancy rates

Source : MBE Conseil according to Immostat

Île-de-France vacancy rates

  • New decrease in Paris' vacancy to 3%.
  • In the CBD, the vacancy rate decreased to 3.4%, and that of other business districts has plummeted to 2.7% due to the lack of available properties.
  • In the suburbs, lease activity has remained relatively stable.

Weighted average rental values for new buildings

Source : MBE Conseil

Weighted average rental values for new buildings

  • In the CBD, average rents for new buildings have increased to €669 due to the scarcity of available properties.
  • Only the western CBD has seen rent levels for new buildings decrease due to the absence of leases for new buildings in La Défense.
  • In suburban areas, the rent value increase is primarily due to large scale transactions in areas surrounding La Défense and in the northern inner ring.

Selected major transactions over 5,000 sq.m in Q2 2017​

Significant transactions for spaces - Juillet 2017
DATETENANT/PURCHASERLETTING/TRANSACTIONSPACE (sq. m)PRICE € / sq. mADDRESSLOCATIONCONDITION
Q2 2017CAP GEMINIL33 250460AquarelISSY LES MOULINEAUXNew
Q2 2017GIDEL17 89267015 rue LabordePARIS 08New
Q2 2017RTEL12 624467Palatin 2 et 3 LA DEFENSENew
Q2 2017DELOITTEL9 466460Opus 12LA DEFENSESecond hand
Q2 2017RSIL8 666270Docks en SeineSAINT OUENNew
Q2 2017EDFL8 479n/aPicasso LibertéNANTERRESecond hand
Q2 2017URSAFFT8 1553 320Le FifteenMARNE LA VALLEENew
Q2 2017SIACI SAINT HONOREL7 300190EquinoxeCLICHYSecond hand
Q2 2017SMCPL5 038700MarengoPARIS 01New
Source : Immostat

Selected major transactions over 5,000 sq.m in Q2 2017​