The Ile-de-France Office Rental Market - January 2022

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Q4 2021 was very active and take-up was almost equivalent to that of 2019. Thanks to this rebound, Paris region take-up totalled 1,853,400 sq m, i.e., a 32% increase compared with 2020.

The <5,000 sq m segment was most active, particularly in Paris Centre West where demand exceeded even the 2019 peak.

Large transactions were limited in 2021. We did however observe a clear rebound in Q4, when 20 of the 55 large transactions of 2021 were signed. Nevertheless, most leases were for 5,000-10,000 sq m units. Very large transactions were almost completely absent this year.

Geographically speaking, most transactions were in Paris and La Defense. In the context of the pandemic and its correlate rise of remote working, companies are favouring Paris as they seek central sites and locations in lively districts that are easily accessible by
public transport. On the other hand, the dynamism of La Defense is due to the large amount of quality supply available at low rents when compared to Paris.

Supply is scarce in inner Paris, and consequently vacancy rates fell to 4% overall in Paris, and even to 3.5% in the CBD. Supply has meanwhile increased throughout the rest of Paris region, with a vacancy rate of 6.9%.

Strong demand coupled with the contraction of supply in Paris is impacting rents which continue to rise. They reached an average of €805/sq m for new buildings in the CBD; prime rent is €930/sq m.

Conversely, incentives continue to rise. These are up by 24.4% overall in the Paris region, ranging from 18.9% in Paris CBD to 30.8% in La Defense.

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Q4 2021 was very active and take-up was almost equivalent to that of 2019. Thanks to this rebound, Paris region take-up totalled 1,853,400 sq m, i.e., a 32% increase compared with 2020.

Géraldine LATHAM

Key figures January 2022

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

Source: MBE Conseil according to Immostat

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

  • 2021 take-up totalled 1,853,400 sq m, i.e., a +32% increase compared with 2020.
     
  • Q4 was very dynamic with a take-up of 631,000 sq m, i.e., +30% compared with Q4 2020.
     
  • As a reminder, the longterm Q4 average is 610,100 sq m for the 2001-2021 period.

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

Source: MBE Conseil according to Immostat

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

  • The <5,000 sq m segment (1.3 million sq m) has recovered to a level that is close to its tenyear average, i.e., +34% increase compared with 2020.
     
  • 55 transactions were signed in 2021 for units >5,000 sq m, i.e., +28% compared with 2020. However, volumes are below the ten-year average (831,000 sq m on average since 2012 - 64 annual transactions).
     
  • Transactions are primarily for units <10,000 sq m; large transactions remain scarce.

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
 

  • The market was concentrated in Paris (+49%), which accounted for 43% of all Paris region take-up volume. CBD take-up totalled 421,000 sq m;
     
  • La Defense also performed well, thanks to a rebound in transactions >5,000 sq m. 10 transactions were signed, but none for more than 20,000 sq m (the largest being 18,000 sq m: SWISS LIFE in BELLINI);
     
  • A rebound has also begun for the rest of the Western business district;
     
  • We observed a 21% increase in the Emerging Northern District, but this was mainly a result of large transactions;
     
  • Other sectors continued to experience low take-up.

Vacancy rate in Île-de-France

Source: MBE Conseil according to Immostat

Vacancy rate in Île-de-France

  • Vacant Paris region supply was up by +10% overall y-o-y;
     
  • The vacancy rate is 6.9%, with 4 million sq m immediately available;
     
  • In Paris, the vacancy rate fell to 4%, and even 3.5% in Paris CBD due to a contraction in vacant space fall in available supply; in the rest of the Paris region, supply is increasing;
     
  • Outside of Paris, La Defense, the Emerging Hub and the Northern crescent are oversupplied; supply continues to increase in the rest of the Western CBD and the Inner Rim South.

Evolution of average weighted rental values for new buildings

Source: MBE Conseil according to Immostat

Evolution of average weighted rental values for new buildings

  • In Paris, rent for new buildings continues to rise. It reached €805 in the CBD, where the prime rent is still €930/sq m, and several transactions have been signed for more than €900/sq m;
     
  • In the Western CBD, average rent has stabilised at €500 with a prime rent in La Defense of €565/sq m and €622/sq m in Neuilly;
     
  • On the other hand, average rents for new buildings in suburban areas are falling;
     
  • At the same time, there has been a marked increase in the number of incentives granted, across all segments.

A selection of large leases >5,000 sq.m signed in Q3 2021:

Significant transactions for spaces - January 2022
TENANT/PURCHASERSPACE (sq. m)PRICE/Sq. mADDRESSLOCATIONCONDITION
SOPRA STERIA8 700555Trinity La DéfenseNEW
EM GRENOBLE5 860300183 avenue Jean LolivePantinNEW
INSEEC (OMNES)13 500540Coeur Défense La DéfenseSECOND HAND
VUITTON12 56992550 MontaigneParis 08 QCANEW
LEDGER7 500840106 rue du TempleParis 03NEW
EIFFAGE13 384360La DistillerieSt OuenNEW
PMU10 400VE UTILThemisParis 17NEW
GROUPE BEAUMANOIR7 623500BloomParis 12 Pôle tertiaireNEW
SAFRAN6 390195L'AvancéeCréteilSECOND HAND
Source: MBE Conseil

A selection of large leases >5,000 sq m signed in Q4 2021: