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 very dynamic.

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 sources: on the one hand, investment funds acquire new or second-hand buildings and rent them out; on the other, companies lease or buy office space directly, depending on their needs and activity.

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, the lowest level since ****. Property values also fell by an average of **% across the continent. This decline is explained ...

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 drop in March ****, certainly linked to health restrictions, there was a significant rebound in April, followed by a fall in May.

After May, sales remained lower than in ****, 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

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

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.
Real estate: Icade to convert part of its offices - 19/02/2024
  • - In 2023, Icade booked almost 5,300 housing reservations, down 12.6% on 2022.
  • - Block sales to institutional investors and social landlords accounted for over 60% of the total, or around 3,600 lots.
  • - Icade was able to maintain its sales in property development at nearly 1.3 billion euros.
  • - Icade signed leases for 243,000 square meters of office and business space - for a total portfolio of 1.8 million m2, up 20% on 2022.
  • - Rental income amounted to 364 million euros (+2.2% on a like-for-like basis).
  • - The valuation of Icade's portfolio has been revised downwards by 17.5% compared with the end of 2022, to 6.5 billion - including 5.3 billion in offices.
  • - Icade plans to diversify further, targeting business premises, student residences and data centers as a priority.
  • - Icade has begun to withdraw from clinics and nursing homes, and has already recouped 1.45 billion euros
WeWork leaves La Défense - 18/01/2024
  • The WeWork site at 30 Terrasse Bellini in Puteaux, the only one in La Défense, recently closed its doors.
  • Despite the closure at La Défense, the company says it intends to maintain a strong presence in Paris, where it has 14 possible sites.
Vinci Immobilier, the first major property developer to launch a redundancy plan - 17/01/2024
  • Vinci Immobilier has set up a job protection plan and begun a voluntary redundancy scheme.
  • The French Federation of Property Developers (FPI) expects sales to be down by half in 2023 compared with 2022.
  • Housing starts were down 19.6% year-on-year at the end of November, with 294,700 units built.
  • In 2023, the number of business failures rose, with 122 developers going out of business, compared with 96 in 2022.
  • For homebuilders, 867 insolvencies were recorded in 2023, after 624 in 2022 and 579 in 2021.
Real estate: Nexity accelerates debt reduction by selling off its property management business - 22/12/2023
  • Value of Nexity assets sold to Bridgepoint: 440 million euros.
  • Nexity sales in 2022: 4.7 billion euros.
  • Number of lots managed by Nexity's property managers: over 800,000.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

BNP Paribas Real Estate France
Altarea Cogedim
Vinci Immobilier
Bouygues Immobilier
JLL Jones Lang Lasalle
IWG Regus (International Workspace group)
Cushman & Wakefield
Arthur Loyd

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