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Summary of our market study
In France, office real estate sales are expected to reach €2.2 billion in 2023
The global office real estate market has slowed significantly since 2020. This decline is reflected in lower investment volumes.
By 2023, the European market had fallen by 59% compared to 2022, with only €39 billion invested.
The French market has also seen a 57% drop in investment over the past year.
Real estate developers and companies are facing an environment where innovation and repositioning are crucial.
Trends in burea's French real estate market
In France, the decline in investment was significant (around 57%), influenced mainly by rising financing costs.
Rising financing costs and changing working patterns, with partial telecommuting and the adoption of flexible office models, are altering demand for office space.
The sector includes several stakeholders, development companies, investment funds and corporations. Property development companies engage in multi-stage operations, often in partnership with various industry players, to develop and manage office buildings.
Demand for office space varies greatly from city to city. Paris in particular has the highest demand, but cities such as Lyon and Bordeaux are also showing strong dynamism.
Market players
Builders and developers in the construction sector
- Vinci Immobilier: Subsidiary of the Vinci group.
- Bouygues Immobilier: specializes in residential, commercial and office property.
- Eiffage Immobilie: part of Eiffage, one of France's leading construction companies.
Real estate developers
- Altarea Cogedim: one of France's leading property development companies
- Icade: A major player
- Nexity: France's leading integrated real estate group.
Real estate service providers and banking sector developers
- CBRE: Global office space specialist.
- JLL (Jones Lang LaSalle): International professional services company.
- BNP Paribas Real Estate: offers comprehensive services covering the entire life cycle of a property
- Gecina
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Summary and extracts
1 Market overview
1.1 Definition and scope of the study
There are many players in the office real estate market, mainly in the fields of development and property management .
At the heart of this market, office property development companies carry out operations in a number of stages, often in collaboration with other players:
- Finding and evaluating land
- Setting up and monitoring operations (works, financing)
- Marketing and delivery
There are a number of indicators for monitoring activity in the office real estate sector, such as annual investments, average rent per m², and take-up.
It is also important to note that demand for office real estate comes from a number of different sources: on the one hand, investment funds acquire new or second-hand buildings and lease them out; on the other, companies lease or buy office space directly, depending on their needs and activities.
The European market has seen a sharp decline in recent years, with nearly €39 billion invested in office real estate in 2023 in Europe - 59% less than in 2022. The market features a wide range of players: real estate developers, property companies, real estate services and property management specialists, as well as new entrants such as WeWork in the coworking segment.
The French market is also in decline, despite Paris being a particularly attractive location. While the Paris region boasts by far the largest office stock in France, it has not escaped the rule in terms of falling demand and investment in the sector, experienced by other major cities - with the exception of Bordeaux.
The global economic situation has had a severe impact on the French commercial real estate market, with a notable -57% drop in investment over the past year. This trend is attributed to rising financing costs, induced by fluctuations in central bank interest rates, prompting investors to adopt a cautious attitude.
Despite the challenges encountered, opportunities for repositioning and innovation are emerging for real estate professionals, particularly with the stabilization of key interest rates, the rebuilding of the real estate premium and the decline in appraisal values. In addition, the transition to a hybrid working model and the growing importance of environmental performance could redefine the corporate real estate landscape in 2024 and beyond.
1.2 The European office property market
The European commercial real estate market.
According to BNP Paribas Real Estate, **** was a difficult year for commercial real estate in Europe, with investment activity falling by an average of **% to *** billion euros, the lowest level since ****. Property values also fell by an average of **% across the continent. This decline is ...
1.3 The French office property development market
The French office property development market
With a CAGR of -*.*% between **** and ****, the office property development market in France is in overall decline, with office occupancy stagnating at around **% in the capital, and a growing adoption of flex office, even reaching **% in Greater Paris. This trend is leading to the ...
1.4 The impact of the Covid-19 crisis
The chart above compares, at base *** ****, the evolution of office property developers' sales between **** and ****.
After a fall in March ****, certainly linked to health restrictions, there was a significant rebound in April, followed by a fall in May.
After May, sales remained below **** levels, but the impact was not too ...
2 Demand analysis
2.1 Macroeconomic determinants of investment demand for office property
Macroeconomic determinants of commercial real estate investment
Real estate as a whole is highly dependent on the general level of economic activity, as reflected in GDP. As the AsiaGreen website explains, there is a strong correlation between GDP per capita and the property price index, whether residential or commercial.
Another important ...
2.2 Take-up of office space varies from city to city in France
According to ImmoStat,take-up of office space corresponds to all rentals or sales to occupiers (***) of office space. It is expressed in square meters of floor space. The indicator only takes into account new leases signed for a term of more than ** months. lease renegotiations and sales to existing tenants are ...
2.3 Breakdown of office property investments in France
The graph below highlights the fact that the Paris region accounts for most of the investment in France.
France, ****, as % of total Source: ****
the table below shows investments and yields in different cities according to BNP Paribas:
given the maturity of the Paris market, yields are higher in the regions.
2.4 Demand trends: the rise of telecommuting
The impact of telecommuting on office demand
Beyond the Covid-** crisis, which caused an explosion in the practice, it had already been on the rise for several years, notably due to repeated strikes and the attractiveness of the practice. According to the Malakoff Humanis survey, teleworker satisfaction rates remained stable at ...
2.5 Demand trends: greater office flexibility and collaboration
Flexible" offices: the rise of co-working spaces or "tiers-lieux"
Demand for coworking spaces is coming mainly from SMEs, start-ups or certain freelancers (***).
Who uses coworking spaces? World, ****, in Source: ****
Nonetheless, large companies could be making increasing use of these spaces, which can complement their offices, according to Les Echos. Indeed, they ...
3 Market structure
3.1 Segmentation and player dynamics
What does it mean to be a property developer?
The criteria for success are rapid marketing and, above all, ensuring that the end result is in line with budget forecasts. To achieve this, a real estate development project often follows the same stages:
Launching the project after studying the opportunities Control ...
3.2 Real estate developers
According to Acoss, the number of employees in the sector rose sharply between **** and ****-** (***), before starting to decline during ****. The number of companies, on the other hand, has tended to stagnate over the period, but is down on ****-****. This may reflect a trend towards concentration around the largest ...
3.3 Analysis of office supply in Paris Region
Office floor space in Paris Region
According to ORIE, there are **.** million m² of usable office space in the Paris region. The graph below highlights the upward trend since ****, which culminated in ****, the date from which the market marked a clear downturn. It is equal to the floor area (***), minus the ...
3.4 Analysis of office supply in France's major regional cities
The table below highlights the supply in the * largest regional office markets, as estimated by CBRE in ****. [***]
Among the problems of office space supply in these metropolises, one of the aspects often mentioned is the lower quality of supply - sometimes poorly located and unsuited to needs (***)[***]
3.5 Where are coworking spaces located in France?
Number of workspaces by region France, ****, in numbers Source: ****
The graph above shows that Paris (***) will dominate the number of co-working spaces in **** in France. Nevertheless, Bordeaux, Nantes, Marseille and Lyon in particular have seen increased growth in recent years.
The chart below highlights that WeWork - despite difficulties in ****/**** - ...
4 Offer analysis
4.1 Analysis of office supply and recent changes
General framework :
Office real estate is part of commercial real estate, as opposed to residential real estate. An office is a workplace in which managers and employees carry out their professional activities, consisting mainly of workstations and meeting rooms, in open or closed spaces. To facilitate employee access and benefit from ...
4.2 Office rental prices by city
The graphs below show the evolution of office property rents in France's main cities.
This is the "prime" rent, i.e. the highest face rent, excluding convenience transactions, for a product of standard size in relation to demand in the market sector, of excellent quality and offering the best amenities, in ...
4.3 What does the future hold for office real estate?
Towards more flexible office real estate in the post-covid ** world:
What role can offices play in the rise of telecommuting?
The rise of partial telecommuting fits in well with the flexoffice trend, so we're likely to see a drop in the number of square meters per person. Telecommuting by no means ...
5 Regulations
5.1 Regulation of investment and real estate activity
Hoguet law hoguet Law: regulation of real estate activity[***]
The activities of real estate professionals (***).
The Hoguet law regulates the following activities:
Real estate agents and business sales representatives; List brokers; Apartment hunters, real estate brokers or business introducers; Property managers; Co-ownership managers.
The PINEL law has made it possible to ...
5.2 Legal form of the main commercial real estate investors
According to the aMF nomenclatureunder the acronym OPCVM (***):
Investment funds
Investment funds are highly international players, benefiting from the blurring of borders in the globalization of financial flows. Their structures can therefore vary greatly depending on the country of origin, and they have no obligation as to the proportion of real ...
6 Positioning the players
6.1 Segmentation
- Icade
- Nexity
- BNP Paribas Real Estate France
- Altarea Cogedim
- Vinci Immobilier
- Bouygues Immobilier
- CBRE
- JLL Jones Lang Lasalle
- WeWork
- IWG Regus (International Workspace group)
- Cushman & Wakefield
- Arthur Loyd
- Arthur Loyd
- Batipart
- Bureaux Locaux
- Ivanhoé Cambridge
- NCT immo
- SFL Foncière Lyonnaise
- GSE Groupe
List of charts presented in this market study
- Trends in commercial real estate investment in selected European countries
- Investment in office property for the European market
- Value of commercial real estate investments
- Breakdown of assets for purchase in the commercial real estate sector favored by the French
- Breakdown of commercial real estate investments in France
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Latest news
GSE, turnkey site supplier, focuses on "responsible" reindustrialization - 16/08/2024
- Based in Montfavet, near Avignon (Vaucluse), GSE has exceeded one billion euros in sales.in turnkey logistics, industrial and tertiary sector projects, with guaranteed respect for deadlines and costs
- Half of our projects are carried out in France, the other half abroad (China, Italy, Spain, Portugal, etc.).
- Logistics account for 60% of our business, industry for 25%.
- GSE's recent references include electrolyser specialist McPhy's gigafactory in Belfort, Précis Plastic Injection's plastic injection workshop in the Allier region of France, and the production site of GSE's subsidiary GSE.Allier, Thiriet's ice-cream production site in Isère, Elis' industrial laundry and Biotech Dental's Smilers unit (3D-printed dental splints) in Provence
- The rehabilitation of industrial wastelands, such as the ManiKHeir factory in the Sarthe region (nitrile disposable gloves), and the restructuring and optimization of haphazardly developed areas are a source of future expansion
- In Entraigues (Vaucluse), GSE has been entrusted by the Greater Avignon community with the development of a 26-hectare industrial zone, "Natura Park".
Altarea launches affordable housing for first-time buyers - 22/05/2024
- Nearly 100 homes marketed one month after the launch of the new Cogedim Access offer.
- Interest rates quadrupled by 2022, reducing the purchasing power of potential buyers by 20% to 30%.
- Private development market down by around 50%, from 150,000 to 160,000 homes a year to around 80,000.
- Altarea's objective: to enable a household earning 3,000 euros a month to buy a three-bedroom apartment with no deposit and monthly payments of 1,000 euros.
- Altarea to reduce housing production from 13,000 units in 2019 to 8,000 units in 2023
- New "Access" housing should account for around 2,500 units of Altarea's business.
- Reduction in the share of Altarea's overall sales generated by property development from 70% to 40%.
Real estate: WeWork closes half of its sites in the Paris region - 30/04/2024
- - WeWork will retain 12 of its 20 sites in the Paris region.
- - 5 multi-company sites in Paris will close, located in the 8th, 9th, 17th and 19th arrondissements, along with 3 premises dedicated to a single customer.
- - The La Défense site, the Group's only facility outside Paris, closed at the end of December.
- - The company retains its full workforce of 84 employees.
- - Customer departures following these changes represent 10% of accounts and 5% of occupied offices.
- - WeWork has signed agreements to renegotiate 170 leases worldwide.
- - The company plans to vacate more than 160 sites worldwide.
Real estate: Nexity announces 500 job cuts - 26/04/2024
- - 502 jobs affected by Nexity's redundancy plan.
- - Nexity's promotion-construction division will reduce its workforce by 28% compared with 2022, when it employed 2,800 people.
- - Nexity employed some 8,200 people at the beginning of the year.
- - 3,100 employees are expected to leave Nexity around April, with the sale of the property administration business to Bridgepoint.
- - Bouygues Immobilier has announced the loss of 225 jobs out of a total of 1,054.
- - Housing sales to fall by a third in 2023 compared with 2022, and by more than half in the last quarter of 2023.
Real estate: Nexity's property managers become independent - 04/04/2024
- - Sale of Nexity's services division to Bridgepoint: 440 million euros.
- - Business areas included in the transaction: condominium management (60% of customers), rental management, transaction and insurance brokerage.
- - Size of business sold: nearly 3,200 employees, over 200 branches, nearly one million customers.
- - New company name after sale: Evoriel.
- - Brands retained: Lamy, Oralia, Richardière, Lamy Assurances.
Real estate crisis: Nexity launches redundancy plan and freezes dividends - 29/02/2024
- - Nexity, the French real estate market leader, has announced a redundancy plan.
- - Nexity sales in 2023: 4.27 billion euros, down 9%
- - Nexity has seen a 25% reduction in new-build reservations compared with the average for the last five years.
- - Nexity currently has around 8,200 employees. Of these, around 3,100 are due to leave the Group in April, following the planned sale of the property administration business to Bridgepoint.
- - Nexity's international sales are down.
- Subsidiaries in Portugal and Poland have already been sold, and the company plans to leave Belgium, sell its platform in Italy and complete its projects in Germany.
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