Despite teleworking, the office property market is picking up again: “The crisis seems to be behind us”

In the office real estate sector, the Covid-19 epidemic has not gone unnoticed. “We had a very complicated 2020 because the market stopped, explains Antoine Matrand, managing director of the Parisian agency Arthur Loyds. Generally, we are in Île-de-France around 2.2 million m² which find buyers on average over ten years. And in 2020, we placed 1.3 million m², which is extremely low. “ With construction sites at a standstill and companies postponing their investments and the development of teleworking, this decline in the market had to be recorded over time.

But the death of the so-called traditional office has not yet struck and the non-residential real estate sector is recovering. “Contrary to what we had said, the crisis still seems to be behind us, even if it is gradually resuming”, explains Ingrid Nappi, professor-researcher at Essec business school. If the health crisis has of course left its mark, the latest figures show a recovery, particularly in Île-de-France, the main office market in France. July to September 2021, there were 406,200 m² of offices in Ile-de-France which found tenants, according to Immostats figures on take-up, which corresponds, depending on the site, to all rentals or sales to the occupant relating to office premises. This take-up is down compared to those of the third quarter of 2019, 180,000 m² less, but up 66% compared to those of 2020.

The companies are therefore not part of the capital and are even looking in the sectors “traditionally in high demand”, explains Ingrid Nappi: “The market is doing well in the Paris region, particularly in intramural Paris, and in business districts.” Indeed, if we look at Immostats figures by zone on this take-up in the third quarter, Paris and in particular the Paris Center-Ouest zone, continues to attract with nearly half of the take-up in the Paris region (48% ) while the first and second crowns do not exceed a quarter of the square meters, 23% in 2021 against 35% in the third quarter of 2019.

For Pierre Antoine Matrand, of the Arthur Loyds agency, there is nothing surprising. Since the crisis, offices will be marketed more quickly depending on the quality of the property and if the building is well placed, that is to say close to public transport: “Even in the inner suburbs, as soon as you are far away, without public transport such as RER, SNCF train station, metro stations less than five minutes from the building, it becomes a complexity to market it.”

In the heart of Paris, the search for space can be tedious, especially with coworking, that is to say office hotels. While this trend has been hit hard by the crisis, it is quickly picking up with the development of teleworking, with consequences for office rental. “There was a drying up of the market linked to a practically monopoly of transactions towards coworking spaces, explains Ingrid Nappi. So much so that rents have dramatically increased and vacancies are very low. This is the case in all European capitals, especially in city centers and central business districts. “ The teacher at Essec is worried about a shortage of rental supply: “There are too many coworking spaces and they will meet another need, that of an entrepreneur or a start up.”

“Coworking spaces do not meet all demands, especially for companies that want a classic rental offer with a lease.”

Ingrid Nappi, professor-researcher at Essec business school

to franceinfo

Companies looking for intramural square meters then turn to other companies. Subletting is growing. The idea is not new, a lease is often long in non-residential real estate, around nine years, and the entire surface of an office is not occupied.

Antoine Matrand sees it very clearly within his agency: “The proportion of sublets has increased a lot. In March 2021, we had around 100 offers to sublet for around 100,000 m², whereas now we have 26 more for around 150,000 m².” This increase is mainly explained by two factors for the managing director of the Parisian agency Arthur Loyds: “The first is that the workforce has unfortunately reduced a little for some companies. And secondly, the organization of teleworking allows companies to free up square meters.” This additional space often results in available floors that are offered to other businesses.

“Subletting is in my opinion the ideal solution for a company with growth”, explains Kilian Bazin, co-founder of Toucan Toco. The company which offers software and applications for other companies has moved for almost a year and a half in the new Batignolles district of the 17th arrondissement of Paris. Of the ten floors in the Parisian building, Toucan Toco sublets two for a surface area of ​​1,400 m².

“The agreement is made with the idea that the company that hires us may very quickly need this space again and does not make a six-year commitment with us., explains Kilian Bazin. And we may need more or less area depending on what happens very soon. “ This flexibility is sought after in this company which has doubled in a very few years. “This situation adapts very badly to the fact of going to look for square meters in Paris, which is extremely expensive”, develops the co-founder of the company.

Within the Toucan Toco company in the 17th arrondissement of Paris, November 2021 (THOMAS DESTELLE / RADIO FRANCE)

However, many positions are free in the Toucan Toco premises, around half of the employees working from home. Kilian Bazin continues to believe in the interest of offices even if they represent the first expense for the company behind salaries: “There is a need for informal interactions between people, emphasizes Kilian Bazin. And there are also constantly new people who return and who need to create relationships with others. Our ability to understand each other eventually grows with lots of little informal signals. “ It is therefore difficult to branch off towards fully teleworking operation only. “There are people who come to the office every day who want external contacts, they feed off that and that’s what gives them energy., develops the company founder. Otherwise, we should fully assume it and also be prepared to lose people who have not signed up for 100% teleworking. “

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