As occupiers remain cautious, take-up levels in the Paris region recorded their lowest level since 2003, exacerbated by many tenants opting to negotiate their existing leases.
With 378,800 sq.m let during Q1 2015 in the Paris region, take-up levels were 26% below the average of the last decade. Very large transactions which have traditionally been the driving force of the office market were especially few with just 5 transactions for properties over 10,000 sq.m recorded in Q1. Nevertheless, both small and mid-sized offices performed well, particularly in Paris where buildings between 1,500 – 4,000 sq.m witnessed the highest levels of activity since early 2007.
Vacancy rose slightly q/q in Île-de-France, standing at 8.2% at the end of Q1. This was partly due to some larger buildings coming onto the market, alongside the continuous release of space and low demand. However, the general stability of available supply masks a strong disparity between assets depending on their quality, with new and redeveloped offices accounting for just 25% of the total volume of supply (13% in Paris proper). The growing scarcity of grade A space is unlikely to be resolved in the short term and may result in some tenants considering either large renovated properties or high quality secondary space in Paris and the western suburbs, that will allow them to lower costs without compromising on the quality of assets or locations.
Source : Cushman & Wakefield