In Paris, office property shaken up by the health crisis with great uncertainties about the future

The professional real estate market is deeply impacted by the health crisis, and the future seems uncertain, which raises fears on the side of La Défense or even in intramural Paris.

2020 will have dedicated teleworking. Adapted response to face the confinement decided in March, teleworking has won over employees and calmed the fears of companies. While the health crisis continues and the consequences should be felt for many months, even several years, these same companies are wondering about the future of their organization, which is not without consequences for office real estate, particularly in Ile de France.

3.3 million m2 unoccupied in Ile de France

Office real estate, like all other sectors of activity, came to a screeching halt in March. And the recovery is not as strong as hoped. Indeed, on the 3th quarter, the area of ​​rental leases fell 58% compared to the same period a year earlier. And over the year as a whole, this drop has already reached 46%.

Companies rent smaller premises and wonder about their future

This consequent drop in demand in Paris and its region therefore leads to an increase in the vacancy of professional spaces, which has fallen into the region of 5 to 6%. 3.3 million m2 are thus unoccupied today. While Paris is doing relatively well (the vacancy rate for professional premises is less than 4%), the La Défense district suffers more severely with an increase from 4.8% in 2019 to 7.6% in 2020. And the many projects in the process of being completed should accelerate this deterioration of a market which is nevertheless dynamic with the crisis.

Rethinking the organization of work

Especially since companies are considering a reorganization of their premises, even though teleworking seems to be part of the habit. Solutions like coworking spaces or even premises ” flex office »Have not yet managed to seduce companies and employees. Several groups have already made it known that they are considering a possible move of their premises, but such a decision cannot be made in a few days.

On the other hand, 2021 could well mark a new trend for the office property market in Ile de France with confirmation of the consequent reduction in the surface areas required, but also a move away of these same premises from the heart of the French capital. And market players fear this situation, even though La Défense district, prices have already started to fall (on average 2%)

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