Knight Frank’s third quarter ‘Paris Office Market Outlook Report’ has highlighted how the office market in the French capital is performing well despite uncertainties due to Brexit.
I’ve decided to comment on the news reported in World Property Journal
According to the article, office take-up in the Île-de-France region amounted to 1.2m square meters in the first half of 2016, high than the volumes achieved for the same period last year. The outlook is set to remain positive with full-year take-up forecast to reach 2.4 million square meters.
What does this mean? It means that there is an increased level of attention towards Paris by business from all over the world – especially for the city’s Central Business District (CBD) and the La Défense business district also.
In La Défense, there has been increased investor activity from corporates such as Deloitte & Associés as well as Bureau Veritas. I’ve written previously about Paris’s office market and the potential capitalisation that may be made from Brexit – this may be another sign of increasing attention on continental Europe as the UK suffers anxiety from the vote, which may still be overturned.
Moving on, the article states that strong pre-letting activity and a ‘constrained development pipeline’ caused a fall in vacancy levels, leaving office availability in Paris’s CBD at 4.1%.
Furthermore, ‘…Grade A space will continue to be eroded as over 50% of the development pipeline to 2019 is already pre-let’ – this article snippet implies that there is a major level of interest from developers in Paris, as the development pipeline is already half-full all the way up until the end of the decade.
Philippe Perello, Office Head, Knight Frank Paris, says:
“The Paris letting market was not impacted by concerns relating to Brexit, and it remains characterized by its depth and its dynamism. CBD and La Défense are the predominant beneficiaries of this environment.”
In summary, a busy year ahead for those looking to capitalise on Paris.
Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.