France Office Real Estate Industry Overview
*Disclaimer: Major Players sorted in no particular order
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France Office Real Estate Market Analysis
The size of France Office Real Estate Market is USD 24.16 billion in the current year and is anticipated to register a CAGR of over 3.7% during the forecast period.
- Due to restrictions, social distancing policies, and a work-from-home culture, the COVID-19 epidemic significantly impacted France's office real estate market. The COVID-19 pandemic significantly changed workplace working habits and locations. As a result of the pandemic, the majority of businesses have implemented remote working. Exogenous shocks like the conflict in Ukraine, soaring inflation, and supply constraints are stifling the French economy. These factors have made economic activity considerably less than anticipated at the start of 2022.
- The effects of the pandemic were felt in Q4 2021 in the office property market, albeit less so than in 2020. The consequences of this crisis were still shaking the market; at the end of the third quarter of 2021, take-up had increased by 32% year over year to a total of 1,207,900 sq m.
- In 2021, major deals, which were far less common than the previous year, would return. The prediction of demand taken up at the end of 2021 was between 1.6 and 1.7 million sq m in this environment of a cautious but genuine recovery in the office market, taking into account a traditional acceleration of signed contracts at the end of the year.
- Since Q2, the Paris office market has gained momentum and picked up speed, with more volume placed in Q3 (195,900 sq m; + 94% in one year).
- Although undoubtedly increasing, this level is still below the ten-year average in this industry. However, this increase in marketing is quite optimistic for the upcoming quarters and shows a genuine resurgence in commercial real estate activity in the capital.
France Office Real Estate Industry Segments
Office real estate is the construction of buildings for leasing and selling purposes to companies from different sectors. This report aims to provide a detailed analysis of the office real estate market. It focuses on the office real estate sector's market insights, dynamics, technological trends, and government initiatives.
France Office Real Estate Market is Segmented by Key Cities (Paris, Marseille, Lyon, Toulouse, and Other Cities). The report offers market size and forecasts for the France Office Real Estate market in value (USD billion) for all the above segments.
|By Key Cities|
France Office Real Estate Market Trends
Paris city with highest rental growth trend per annum
Paris city has consistently been regarded as a haven investment because it performs better throughout the cycle's recovery phase and is more defensive during market or economic downturns.
The French office market and all other submarkets in the Paris region have lagged behind Paris city in terms of overall returns since the recovery from the Global Financial Crisis began in 2014.
In addition to having the strongest annual rental growth trend, fueled by attractive net operating income growth and dividends for investors, Paris city has had higher capital growth driven by a strong cap-rate reduction.
The Parisian tenant landscape's innovation and product development have been the driving forces behind such rental value growth as the city's economic foundation caught up in terms of digitalization, robotization, and other technology.
The Parisian office market will continue to be a key allocation in real estate portfolios as long as rental value growth offsets the increase in the discount rate.
The sales recovery that started in Q2 2021 reached a new cruising speed in Q3, when a volume of 107,300 sq m was placed, a level 15% higher than the 10-year average and comparable to that seen in 2019 over the same period.
Since Q2, the Paris office market has gained momentum and picked up speed, with more volume placed in Q3 (195,900 sq m; + 94% in one year).
Take-up for the quarters totaled 505,600 sq m, an increase of +47% from last year. This figure is slightly below the annual result for 2020.
Although undoubtedly increasing, this level is still below the ten-year average in this industry. However, this increase in marketing is quite optimistic for the upcoming quarters and shows a genuine resurgence in commercial real estate activity in the capital.
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Vacancy rates increase in Paris
Paris is one of Europe's largest commercial hubs and a global cultural center. The capital, which accounts for a sizeable portion of France's GDP, is home to some of the nation's greatest local and foreign corporations, including AXA, Credit Agricole, Societe Generale, and BNP Paribas, making its office market particularly alluring. Paris had the second-highest office rent among the main European markets in 2021, only behind London.
Although the industry was prepared to withstand the effects of the pandemic, vacancy rates kept rising, and in some submarkets in Greater Paris in the first quarter of 2022, they exceeded 10%. On the other side, the industrial and logistics sector profited from the growth of e-commerce and saw a substantial increase in demand. In the important markets, there was an increase in rentals and take-up, a measurement of the quantity of space transacted.
International investment flows specifically targeted the Paris market, which accounted for 41% of the EUR 6.7 billion (USD 16.4 billion) in commercial real estate in the city this year. This year, South Koreans prioritized the French market over the British market and invested the lion's share of this global cash.
France Office Real Estate Market Competitor Analysis
The France office real estate market is highly fragmented, with the presence of global and regional players, and the competition in the market is very high. Some major real estate players in the France include JLL France, Knight Frank, CBRE France, etc., Hines, Kaufman and Broad SA, Legenfre Group, and RedMan are the major office real estate developer companies in the France office real estate market. The market was anticipated to regain normalcy by the end of 2022. Companies are gearing up to meet future needs, and many are entering the market for further opportunities.
France Office Real Estate Market Top Players *
Kaufman & Broad SA
*Disclaimer: Major Players sorted in no particular order
France Office Real Estate Market Recent Developments
- June 2022: Along with Paris-based specialist investor and asset management, Atlantic Real Estate, ICG Real Estate, ICG's real estate subsidiary, developed a new investing platform. The platform aids in purchasing or developing light industrial and last-mile logistics properties around Greater Paris and other significant French population centers. This platform is aiming to build a portfolio with a gross asset value of at least EUR 500 million ( USD 531 Million).
- April 2022: Business Immo, France's top commercial real estate news service, has been acquired by CoStar Group Inc., a major provider of online real estate marketplaces, information, and analytics in the commercial and residential property markets. With the addition of Business Immo, their increasing global presence gains another premium asset.
France Office Real Estate Market Report - Table of Contents
1.1 Study Background
1.2 Study Assumption and Market Definition
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS AND DYNAMICS
4.1 Market Overview
4.2 Market Dynamics
4.2.1 Market Drivers
4.2.2 Market Restraints
4.3 Technological Innovations in the Office Real Estate Market
4.4 Government Regulations and Initiatives in the Industry
4.5 Insights into Rental Yields in the Office Real Estate Segment
4.6 Insights into the Key Office Real Estate Industry Metrics (Supply, Rentals, Prices, Occupancy/Vacancy (%))
4.7 Insights into Office Real Estate Construction Costs
4.8 Insights into Office Real Estate Investment
4.9 Industry Value Chain Analysis
4.10 Industry Attractiveness - Porter's Five Forces Analysis
4.10.1 Threat of New Entrants
4.10.2 Bargaining Power of Buyers/Consumers
4.10.3 Bargaining Power of Suppliers
4.10.4 Threat of Substitute Products
4.10.5 Intensity of Competitive Rivalry
4.11 Impact of the Covid-19 on the Market
5. MARKET SEGMENTATION
5.1 By Key Cities
5.1.4 Other Cities
6. COMPETITIVE LANDSCAPE
6.1 Overview (Market Concentration, Major Players)
6.2 Company profiles - Real Estate Players*
6.2.1 JLL France
6.2.2 Knight Frank
6.2.3 CBRE France
6.2.4 BNP Paribas Real Estate
6.2.5 Cushman & Wakefield
6.3 Company Players - Developers*
6.3.3 Kaufman & Broad SA
6.3.4 Hermitage Group
6.3.5 Legendre Group
7. FUTURE OF THE MARKET
France Office Real Estate Market Research FAQs
What is the study period of this market?
The France Office Real Estate Market is studied from 2019 - 2028.
What is the growth rate of France Office Real Estate Market?
The France Office Real Estate Market is growing at a CAGR of 3.7% over the next 5 years.
Who are the key players in France Office Real Estate Market?
JLL France, Knight Frank, CBRE France, Kaufman & Broad SA, Legendre Group, Hines are the major companies operating in France Office Real Estate Market.
France Office Real Estate Industry Reports
In-depth industry statistics and market share insights of the France Office Real Estate Market sector for 2020, 2021, and 2022. The France Office Real Estate Market research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the France Office Real Estate Market report PDF.