Offices in Ile-de-France and investments in France: markets that navigate by sight

Ile-de-France offices:

In this first half of 1, take-up of offices in Ile-de-France is in line with 2024 with 2023 m² (-853.300% over one year and -5% compared to the ten-year average). Volumes are slightly worse in this 18nd quarter with 2 m² placed (- 408.700% over one year) due to the lack of large transactions > 9 m². However, this trend should be put into perspective.

For Alexandre Fontaine, Executive Director Offices IDF: “The demand from large users is there but negotiation times have lengthened significantly and projects are taking time to come to fruition. The postponements of signatures will nevertheless make it possible to fuel activity > 5.000 m² in the 3rd quarter. Over the year 2024, in view of the ongoing negotiations, the placed demand from large users should be a little better than 2023. Nearly sixty operations > 5.000 m² are expected with a volume slightly higher than that of 2023 thanks to to a resumption of transactions between 10.000 and 20.000 m². Cost optimization and area reduction strategies will continue but nevertheless seem to have reached a high point. This better dynamic on the side of large projects will make it possible to partially compensate for marketing volumes that are undoubtedly a little more constrained in the small and medium-sized area. Trends, of course, to be confirmed given the many uncertain factors weighing on the sector, such as the holding of the Olympic Games or the possible impacts of the legislative elections. »

For Alexandre Fontaine: “With an immediate supply available which continues to increase and reaches 4.983.000 m² in the 2nd quarter of 2024, the rent differences between the different tertiary sectors are increasing. In Paris, which is facing a slight loosening of supply constraints this quarter with an average vacancy rate of around 4,6% (+0,4 pt), average rents are starting to stabilize in certain areas. . On the other hand, prime rents continue their upward trend, particularly in Paris Center West. At the same time, in the periphery, downward pressures in certain over-supply sectors are increasingly strong (La Défense, Péri-Défense, etc.). »

Investment France - loss of confidence and navigation at sight

Given the context, the results are ultimately rather honorable with €4,1 billion invested in commoditized corporate real estate since the start of the year, and some good news in Q2: first of all, the activity confirmed its restart in Industrial & Logistics, the only so-called commoditized real estate asset class to record increasing annual performances (+ 27% between H1 2023 and H1 2024). Another positive point: the Ile-de-France office market is regaining some depth, even if buyers remain hyper selective, in the case of a very polarized market in inner Paris.

The horizon therefore seemed to be brightening since the start of the year: even if the few active investors in acquisition remained cautious, we observed a slight improvement in the level of activity. This was without taking into account the upheavals of political life: “the first results of the legislative elections are confusing investors' projections and further postponing the prospects for recovery, but this time without any visibility on the landing zones” indicates Nicolas Verdillon, Managing Director Investments Properties.

It is very likely that the worry and uncertainty generated by the economic and political situation will result in a renewed wait-and-see attitude and a lack of confidence among investors, who will then have to navigate things by sight. This risks further reducing real estate liquidity in the coming months.

For Nicolas Verdillon: “However, in the longer term, stone still remains a relatively resilient investment and can perform well in times of turmoil. Furthermore, a certain recovery in the investment market among our European neighbors such as the Netherlands, Germany, Italy (which show increasing annual trends) reminds us that real estate remains a sector with a intrinsic attractiveness, subject to a satisfactory risk premium, allowing sellers and buyers to align on prices. »

Illustrative image of the article via Depositphotos.com.