Office Rental Market - November 2019

DOWNLOAD 2017 CATELLA PROPERTY'S ANNUAL STUDY

* required fields
pdf-cover

Take-up has decreased by 11% during the first 9 months of 2019, despite a positive Q3 compared with 2018.
 

Once again, this is due to the slowdown in large surface transactions in excess of 5,000 sqm, which dropped by -28% in the first nine months of the year.
 

Geographically, only the Inner Rim North escaped the decline. Paris CBD and the Southern sector proved resilient. On the other hand, La Défense continued to suffer after a disappointing 2018.
 

Vacancy rates have continued to drop and space remain scarce in several sectors.
 

Nevertheless, although immediate supply continues to drop (-5% since end 2018) a strong 9% increase in supply due within one year for the 1st time since 2013 as a result of a 43% surge in space to be delivered or vacated within the year could indicate a slight increase in vacant space between H2 2019 and H1 2020.
 

CBD rent for new space continues to rise (€735/sqm). However this is also true for second hand space where rents have exceeded the €600/sqm threshold (€624/sqm).
 

Incentives have also reached a stable low in Paris (around 12% in the CBD) and these have begun to decrease significantly in other sectors...

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

SUBMARKETS MAP

Take-up has decreased by 11% during the first 9 months of 2019, despite a positive Q3 compared with 2018.

Géraldine LATHAM

Key figures November 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 has decreased by 11% in the first 9 months of 2019 totalling 1,655,000 sqm.
     
  • For the first time since the start of the year, the quarter recorded an increase compared with the previous year, but not enough to compensate for the drop since the beginning of the year.

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

Source: MBE Conseil according to Immostat

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

  • Take-up for space in excess of 5,000 sqm has dropped by 28% compared with 2018, totalling 530,000 sqm.
     
  • Take-up even dropped to 35% for surfaces larger than 10,000 sqm. The slowdown is of course due to the scarcity of new buildings delivered, the decrease in pre-lettings (-42%) and the absence of turnkey transactions.
     
  • Conversely, the less than 5,000 sqm market performed well and remains stable.

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

  • Take-up in the Southern sector and Paris CBD remains resilient thanks to 3 new transactions for more than 5,000 sqm in the quarter, bringing the number of transactions of this size to 8 in the first nine months of the year (and 12 in Paris Centre West).
     
  • The emerging North sector has escaped the slowdown thanks to 3 transactions for more than 5,000 sqm, a 91% increase.

Vacancy rate in Île-de-France

Source: MBE Conseil according to Immostat

Vacancy rate in Île-de-France

  • Scarcity is increasing in the greater Paris area.
     
  • The vacancy rate in Paris and the CBD is stabilising at 1.7%.
     
  • The vacancy rate in suburban areas has dropped slightly to 6%, and to 5.8% in the Western CBD (excluding La Défense) due to scarcity.

Evolution of average weighted rental values for new buildings

Source: MBE Conseil

Evolution of average weighted rental values for new buildings

  • In the Paris CBD, average rent for new space continued to increase to €737/sqm.
     
  • In business districts and the Western CBD, rents are stabilising.
     
  • Rents have decreased slightly in suburban areas despite two major transactions in Montrouge for €360/sqm and Nanterre for €410/sqm.

Selected major transactions over 5,000 sq.m in Q3 2019

Significant transactions for spaces - Novembre 2019
DATETENANT/PURCHASERLETTING/TRANSACTIONSPACE (sq. m)ADDRESSLOCATIONCONDITION
Q3 2019SNCFL31160Campus SFRSAINT-DENISSECOND HAND
Q3 2019CRÉDIT AGRICOLEL30096L'AcadémieMONTROUGENEW
Q3 2019HERMÈSL8166Hight - 8 rue de PenthièvrePARIS 08NEW
Q3 2019PEPSICOL7561Les Portes de La DéfenseCOLOMBESSECOND HAND
Q3 2019PLANETA DE AGOSTINIL6615Le BrabantPARIS 19 NEW
Q3 2019TOTAL (équipe digital)L545933 rue des JeuneursPARIS 02NEW
Source: MBE Conseil

Selected major transactions over 5,000 sq.m in Q3 2019