Office Real Estate Market in France sees Strong Start to the Year
Just as the residential property market has started with a bang, the office real estate market in France has seen a very strong first quarter of 2017. Precis.
New statistics from GIE Immostat shine a light on the first quarter performance of France’s office real estate market. The initial numbers look good, although the uncertainty surrounding the presidential election has led to a fall in one measure of market activity.
Immostat’s research shows that 664,000 m2 of office real estate in France were commercialized – leased or sold – on the market. This figure is 27% higher than that recorded in the first quarter of 2016, a testament to France’s sustained, albeit sluggish economic recovery.
The main driver behind the good figures was a particularly high number of large transactions, those totalling over 5,000 m2. There were 19 of these in total, contributing half (323,000 m2) of the overall figures for the office real estate market in France.
One of the most notable of these was the leasing of the Tours Duo skyscrapers, currently under construction in the 13th arrondissement and set to be the first new ones built since Montparnasse Tower in 1973. The deal with French investment bank Natixis was reportedly worth 500 million euros and will cover 87,000 m2 of office space, 8% of the total commercialized in the national market during the quarter.
However, it wasn’t all good news as the presidential election hots up with the result completely up in the air. Investment in the office real estate market in France was actually down in the first quarter. A total of 3.5 billion euros was recorded, 22% less than the same period last year. But Paris, as usual, bucked the nationwide trend: 2.3 billion euros of investment this time round, 21% higher than last year (1.9 billion euros).
For investment to pick back up, the election would undoubtedly need a Macron or Fillon victory. Both wish to liberalize the economy and increase unemployment and Macron in particularly would provide a boost to investors looking to the office real estate market in France. He wishes to cut corporation tax and pivot the wealth tax to property wealth rather than business investment.
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