The office market in the greater Paris region regained momentum in the first half of 2021 with a 14% year-on-year increase in take-up. This growth was seen at all space size levels, which is very reassuring for the future.
Even so, we are still a long way from returning to pre-COVID levels. We will have to wait until next year to see a return to these levels of demand.
Paris remained dynamic with a 24% increase, even though this mainly concerns a market for small and medium-sized spaces. This allowed it to maintain a break-even vacancy rate.
Large transactions (> 5,000 sq m) in Q2 were mainly in the Hauts-de-Seine department, with six out of a total of nine transactions.
In the greater Paris region, vacant space was up, more significantly than in Q1. It passed the 4 million sq m mark, leading to the current vacancy rate of 7.7%.
There was little effect on rents on new buildings, which even continued to rise in the Paris CBD, albeit more moderately. Incentives further increased overall in all tertiary areas. However, rents on second-hand offices began to fall in all areas except the CBD. This was especially the case in areas presenting an oversupply.

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The office market in the greater Paris region regained momentum in the first half of 2021 with a 14% year-on-year increase in take-up.

Géraldine LATHAM

Key figures July 2021

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 totalled 766,000 sq m in the first half of 2021, a 14% year-on-year increase;
     
  • However, this is still well below the average takeup for a second quarter, which is 540,000 sq m over the last 20 years.

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

Source: MBE Conseil according to Immostat

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

  • In the first half of the year, 23 transactions over 5,000 sq m were completed, almost as many as in 2020 overall when 21 transactions were completed (compared with an average of 65 transactions per year);
     
  • However, these were mainly transactions for 5,000 to 10,000 sq m in the first half of the year and not very large transactions. This explains the stable sq m of take-up between the first half of 2020 and the first half of 2021 (approximately 218,000 sq m);
     
  • The market for small and medium sized spaces remained dynamic (+21%).

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

  • Paris had a good volume of transactions, especially in a market for small and medium sized spaces, since only three transactions over 5,000 sq m were completed;
     
  • Performance in the Western CBD (excluding La Défense) was good at +66%, including four transactions over 5,000 sq m in the first half of 2021;
     
  • However, take-up in La Défense remained down 58% despite three large transactions;
     
  • The PériDéfense district and the outer ring of suburbs were also dynamic compared with the previous year (between 67% and 69%).

Vacancy rate in Île-de-France

Source: MBE Conseil according to Immostat

Vacancy rate in Île-de-France

  • Vacancy rates continued to rise in all areas, but at a more moderate pace;
     
  • Paris remained at break-even, but with a rate in the CBD that has now reached 5%;
     
  • The Western business district (excluding La Défense) still had a slight oversupply but stabilised at around 8.1%, while the vacancy rate in La Défense continued to increase (+1.6 point);
     
  • In suburban areas, oversupply remained high in PériDéfense and the Northern Ring.

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 Q2 2021, average rents for new buildings continued to rise to reach their highest level;
     
  • However, the number of transactions at rents above €750 per square meter was very limited;
     
  • The rise in rents in the Western CBD was marked by a large transaction in Neuilly-sur-Seine;
     
  • The increase seen in the suburbs was impacted by the headline rents of EVIDENCE in Saint-Ouen and H2B in Clichy;
     
  • In addition, incentives increased in almost all areas.

Major transactions for more than 5,000 sq m completed in Q2 2021:

Significant transactions for spaces - July 2021
TENANT/PURCHASERSPACE (sq. m)ADDRESSLOCATIONCONDITION
CAMPUS CYBER23 994 Tour Eria PUTEAUXNEW
EM NORMANDIE13 734H2B - 32 rue Henri BarbusseCLICHY SUR SEINENEW
INGENICO WORDLINE13 700Tour VoltaireLA DEFENSESECOND HAND
UP13 600GardensGENNEVILLIERSNEW
ALDI8 715Parc Icade Paris Nord 2 - VillepinteROISSYSECOND HAND
TECHNIP FMC6 975Tour TrinityLA DEFENSENEW
SANOFI6 231Paris Biopark PARIS 13NEW
INEO SYSTRANS5 660Mail Gay Lussac (Lot B3)NEUVILLE SUR OISENEW
UNOWHY5 030Le 168 - av. Charles de GaulleNEUILLY SUR SEINENEW
Source: MBE Conseil

Major transactions for more than 5,000 sq m completed in Q2 2021: