The sustained economic recovery continued to support the French office market in the final quarter and, with a take-up of almost 700,000 sq.m in Q4, this was the best quarterly result in Ile-de-France since the end of 2012. Office investments were particularly strong and yields moved in as a result in Q4.
Following a moderate increase over the year, annual take-up in Ile-de-France reached 2.2 mn sq.m in 2015. This good performance is due to the sharp increase in the total number of deals and the rebound in demand in Paris and the Southwestern suburbs. Performance of other districts are mixed, notably in the WBD and La Défense which suffered from a lack of large transactions. There was little change in prime headline rental values in Q4, however, upward pressure on rents has been noted in some areas due to strong demand coupled with a lack of quality supply (Paris and the Southwestern suburbs). Elsewhere, adjustments are still being seen with rent-free period ranging between 2 to over 3 months per year of commitment. The volume of available supply within 6 months remained relatively stable while the pace of absorption accelerated in some key markets such as the CBD.
Source : Cushman & Wakefield