The French property investment market totaled €15.1 billion in 2013, a 1% increase from 2012. While investment volume was stable, the number of transactions declined. Large portfolio deals represented a smaller portion of the market compared to previous years. Office properties accounted for most investment in the Paris region, totaling €11.1 billion or 74% of the French market. Retail properties drove investment in other French regions, totaling €4 billion or 26% of the market. The top investors in France were from France, the United States, and the United Kingdom. The office sector saw more interest in higher risk assets while retail and industrial remained active. Overall, the French market remained stable but uncertainties remained around the economic recovery
2. January 2014
A Cushman & Wakefield Research Publication
Contents
EDITORIAL 3
eCONOMy 5
FRENCH PROPERTY INVESTMENT market 7
Investment Volume
8
Investment Volume by Location
8
Key Investors
9
Offices 11
Retail 13
Industrial 15
Yields 17
Outlook 17
ILE-DE-FRANCE OFFICE MARKET
19
Occupier Demand
20
Rental Values
24
Available and Future Supply
25
Outlook 27
FRENCH LOGISTICS-WAREHOUSES MARKET
31
Economic Trends
32
Occupier Demand
32
Rental Values
34
Available and Future supply
34
Outlook 35
FRENCH RETAIL MARKET
37
Economic and Legal Environment
38
The New Role of Stores
39
Retailer Demand
41
Trends in Supply
45
Rental Values
49
Outlook 50
Glossary 52
CONTACTS
2
54
3. editorial
A Cushman & Wakefield Research Publication
eDITORIAL
In addition to regular episodes of French bashing in the international
media, recent changes on the political and economic scenes have
reinforced fears among the French, a people not known for their
optimism. Forecasters expect at best a timid recovery in 2014, far
from the solid activity seen on the other sides of the Channel and
Atlantic, and equally remote from the robustness of the German
model. Yet while skepticism persists, most economic indicators for
France are moving in the right direction. The belief that the worst
is behind us could begin to dispel the cloud of uncertainty that has
long darkened the French commercial-property market.
Furthermore, the gap between the relatively stable investment
market and the more chaotic rental market is likely to narrow.
As the French property market recovers, Cushman & Wakefield
France will further expand its services in order to provide
customized advice to all players in the commercial-property
market, to address their concerns, and to help them adapt to
rapidly changing market conditions. Our dynamic and experienced
teams, which moved from strength to strength in 2013 – the sales
of 8 place Vendôme, a portion of the Altarea portfolio, the Passy
Plaza shopping center in Paris, and Boursorama’s new offices in
Boulogne, as well as the opening of the first Primark stores in
France and the Valentino boutiques in Paris and Saint-Tropez – will
provide the same outstanding service in 2014.
The gulf is nonetheless too wide to encourage any clear-cut
improvement in the short term. In 2013, good news was mixed
with bad: a 1% rise in investment in France and the lowest take-up
in the Paris region since 2003. We may reasonably expect a
moderate rise in lettings of office and warehouse properties in
2014, but economic, fiscal, and regulatory instability will continue
to inspire caution among tenants. Many occupiers now prefer lease
renegotiation to moving, while others choose to relocate but do so
with very conservative standards. Their targets are usually
conveniently located, high-quality sites that meet both cost-cutting
and modernization criteria. The deep divisions within the French
market are not expected to disappear; hence the increasing
urgency of questions concerning the future of the most obsolete
sites, and the technical and economic feasibility of adapting to new
standards.
On a positive note, investment in France should be considerably
higher than in 2013, in line with the growth of more than 10%
forecast for investments worldwide in 2014. Several large and very
large transactions are already under way, confirming the significant
amount of money to be invested and the enthusiasm of long-term
institutional investors (e.g., insurance companies, sovereign wealth
funds, and new international players) for core assets. Greater
concessions made by vendors and renewed interest from
opportunistic investors will favor even less-secure assets and
enhance the French market’s appeal to a wide variety of investors.
Olivier Gérard
President
3
5. eCONOMy
A Cushman & Wakefield Research Publication
eConomy
A falling unemployment rate in the United States, buoyant private
consumption in the United Kingdom, and gradual business recovery
in the euro zone confirm that the economies of developed
countries have improved since the end of 2012. After rising 1.2%
in 2013, GDP in OECD member countries should grow even faster
in 2014 (2.3%) and 2015 (2.7%), a global forecast that does not
necessarily apply to every region. While growth in the euro zone is
expected to rise slightly in 2014, and the countries hardest hit by
the economic crisis (i.e., Spain, Greece, Italy) will likely pull out of
recession, the story of the next few months will mainly be about
the confirmation of Germany’s robust health. Strong exports and
domestic demand have led the Bundesbank to raise its growth
outlook for 2014 to 1.7%, after the slowdown in Q3 2013.
Yet recovery is both uneven and very fragile. The vulnerability of
banking systems and the magnitude of public debt continue to
darken the economic horizon of developed countries. This is
particularly true in Europe, where austerity policies weigh on
household consumption. According to the latest European
Commission forecasts, household consumption in EU countries
will increase by only 0.9% in 2014, compared with 1.8% per year
between 2003 and 2008 and 2.5% per year between 1998 and
2003. Significant improvement in the job market is unlikely. The
unemployment rate, estimated at 11.1% in 2013 for the 28 member
states, is not expected to fall significantly by the end of 2015 (10.7%
est.).
While the structural problems of Europe and developed countries
such as Japan may remain the center of attention, they are no
longer the major source of uncertainty for the global economy.
Business activity slowed in 2013 in numerous emerging economies:
Exports and manufacturing output rebounded in 2013, helping
French business activity that was also supported by the upturn in
other parts of Europe. Household consumption was aided by the
generous social-security safety net, a very low inflation rate, and a
more moderate rise in taxes. In addition, GDP growth in France—
flat in 2012—may edge above 0% in 2013 and reach nearly 1% in
2014. French economic difficulties are far from over, however, as
may be seen in the growing number of redundancy and restructuring
plans by major multinational groups (Alcatel-Lucent, PSA, Michelin,
etc.). As a result, business activity remains well below its long-term
average. Corporate bankruptcies and unemployment stand at
record highs nationwide, although Île-de-France has shown a
certain resilience as measured by these two economic indicators.
Combined with stagnant salaries, a deteriorating job market will
continue to undermine the budget and morale of the French as
hope for a clear recovery in consumer spending in the months
ahead grows more distant. Companies will also continue to struggle
under a heavy, unpredictable tax burden. Capital expenditure will
therefore likely remain low in 2014.
French economic activity
Economic outlook (in %)
Indicator (%)
Russia’s oil and gas reserves no longer suffice for growth, severe
inflation has hurt India, and China’s economic model is still too
dependent on exports. These challenges explain the downward
revision of global growth forecasts for the next two years.
According to the WTO, world trade growth is expected to increase
at a much slower rate than previously forecast, with growth of 4.5%
expected in 2014, better than the growth of 2.5% in 2013 but still
under the average of the past 20 years (5.4%).
EURO ZONE
USA
JAPAN
-0.4
1.7
1.8
GDP growth – 2014**
1.0
2.9
1.5
Unemployment rate – 2013*
12.0
7.5
4.0
Unemployment rate – 2014**
12.1
6.9
3.9
General government financial
balance – 2013*
-2.9
- 6.5
-10.0
GDP growth – 2013*
General government financial
balance – 2014**
-2.5
-5.8
5,0
5,0
5,0
2,5
2,5
2,5
0,0
0,0
0,0
-2,5
-2,5
-2,5
-5,0
-5,0
2002
2002
-8.5
*Estimated **Forecast - Source: OECD (the general government financial balance is calculated as a percent of nominal GDP)
5,0
2,5
0,0
-2,5
2004
2004
2006
2006
2008
2008
GDP growth (annual %)
Croissance du PIB (annuelle %)
2010
2010
2012
2012
-5,0
-5,0
2014 f
2014 P
Inflation (annual %,)
Inflation (annuellle %)
Source: INSEE
5
7. 01
FRENCH PROPERTY
INVESTMENT Market
Investment in France amounted to €15.1 billion in 2013, 1% more than the
previous year’s total and just 3% less than the ten-year average. The retail and
industrial sectors have remained active, despite the underlying economic and fiscal
uncertainties and an office sector impacted by a weak occupational market. The
French market attracted a growing number of investors, drawn by a wide offer of
investment profile opportunities created by disposals from tenants that aimed to
rebalance their portfolios or that were forced to sell.With adjustment of pricing on
non-core assets, transactions for less secure investments also played a significant
role. This allowed a few opportunistic invertors to be more active, alongside longterm institutional investors targeting France’s most iconic assets.
”
HISTORIC INVESTMENT ACTIVITY IN France (€ BN)
30
25
20
15
10
12.2
17.5
24.4
28.5
13.0
7.8
11.0
16.5
14.9
15.1
0
9.8
5
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2003-2012 average (€15.6bn)
8. January 2014
A Cushman & Wakefield Research Publication
INVESTMENT VOLUME
INVESTMENT VOLUME BY LOCATION
The overall performance of the French market in 2013 was similar
to that of 2012. The total number of transactions continued to
decline (393, compared with 421 in 2012 and 451 in 2011), although
overall volume was supported by a substantial element of large
transactions.There were 36 transactions of more than €100 million,
for a total of €7.3 billion (i.e. 48% of total investment in France in
2013). A more detailed breakdown by transaction-volume slice,
however, shows that the market is in the process or readjusting to
a more conventional profile. Transactions of €100-200 million were
relatively stable year on year (€3.9 billion), while transactions of
more than €200 million declined by 17% (i.e., -€700 million).This fall
was compensated for by activity in the €50-100 million segment,
which saw 52 transactions in 2013 for a total of €3.7 billion
(compared with 39 transactions for a total of €2.7 billion in 2012).
Paris / Île-de-France
Because of the decline in large-volume transactions, portfolios
played a less decisive role in 2013 than in the previous year. At
€3 billion, portfolios represented only 20% of total amounts invested
in France, compared with €4.1 billion (27%) in 2012. However, large
portfolios still played a role across the various asset classes: office
properties (Docks Lyonnais portfolio sold to ADIA), retail
properties (Vivarte portfolio acquired by La Française AM), and
industrial properties (Logicad portfolio sold by Icade to Apollo).
Some of these transactions were carried out as joint ventures, the
preferred structure of certain large investors aiming to increase
their exposure to the property sector while benefiting from the
knowledge and experience of major pure players. NBIM (with
Prologis in the logistics sector) and Allianz (with Altarea in the
shopping-center sector) partnered with specialists that were
offering stakes in their portfolios. These two investors used JVs as
investment vehicles in 2011 and 2012: NBIM acquired from Allianz
half of a Parisian portfolio comprising mainly office properties, and
Allianz acquired from Hammerson 75% of the Espace Saint-Quentin.
100%
100%
80%
60%
26%
64%
64%
60%
28%
28%
67%
67%
51%
20%
20%
0%
0%
9%
€15-50m
20%
21%
24%
26%
80%
49%
51%
26%
26%
49%
23%
23%
23%
23%
24%
24%
10%
10%
9%
9%
2013
2013
France
France
2013
€1-15m
8%
2012
2012
France
France
Office
Office
2012
2013
2012
2013
2012
Provinces
Provinces Provinces
Provinces
Retail
Retail
Industrial
Industrial
% in volume
18%
€50-100m
24%
% in volume, all products
8
INVESTMENT VOlUMES BY ASSET TYPE AND LOCATION
40%
28%
€100200m
25%
Of this €11.1 billion, 78% was invested in office assets, a stable
percentage in comparison with the previous year. While Paris’s
most desirable office buildings remain highly sought after, there has
been a renewed interest in office buildings with higher risk profiles,
both in Paris intra muros and in certain office poles in the inner
suburbs. At €1.9 billion (€1.7 in 2012), investments in retail
properties in the Paris region were also relatively stable year on
year (17% of total investment in Île-de-France in 2013, compared
with 15% in 2012). Activity in the retail sector was underpinned by
large transactions for iconic mixed-use buildings (65–67 ChampsÉlysées), large shopping centers (Passy Plaza), and large portfolios
containing assets located in Île-de-France (Altaprime, Vivarte, and
Metro portfolios). Industrial properties accounted for €580 million
in 2013, 23% more than in 2012.
40%
DEAL ANALYSIS in france
>€200m
23%
Investment in Île-de-France amounted to €11.1 billion, accounting
for 74% of total investment in France in 2013 and for 27 of the
36 transactions larger than €100 million nationwide. The Paris
region remains the driving force of business in France. With one of
the largest stocks of real estate in the world, Paris is headquarters
for numerous French and international groups.
9. INVESTMENT
A Cushman & Wakefield Research Publication
Provinces
An overall investment of nearly €4 billion in the provinces accounted
for 26% of total investment in France in 2013, a stable performance
year on year but 18% higher than the ten-year average (€3.4 billion).
The proportion of investments in retail properties (€2 billion in
2013) rose to 51% in 2013 from 49% in 2012, while investments in
the office sector declined slightly, from 28% of total investment in
2012 to 26% in 2013. Retail properties continued to drive the
market in the provinces, notably through the sales of malls and
large shopping centers (Immochan portfolio sold to CNP, disposal
of 50% of Odysseum shopping center in Montpellier, acquisition by
Eurocommercial Properties of a shopping center in Val Thoiry, etc.).
However, this general trend does not conceal the significant
differences among regions. With €990 million invested, the RhôneAlpes region is by far the largest market outside Île-de-France.
Large transactions for new and recent office supply (City One in
Lyon, Silky in Vénissieux) and sales of vast retail and industrial sites
(Val Thoiry, Parc du Moulin in Vent) have moved the Rhône-Alpes
region ahead of Provence-Alpes-Côte d’Azur (€290 million
invested, of which 65% for logistics assets) and Nord-Pas-de-Calais
to be refurbished or presenting tenant risk (CACIB headquarters
in Courbevoie acquired by Blackstone, River Plaza in Asnières-surSeine sold to KKR). UK investors were more diverse in their asset
targets: logistics, with the new Maisons du Monde platform near
Marseille; offices, with part of the Ponant building in the 15th district;
retail, with the Metro portfolio; and even the core segment.
German investors, still the largest foreign investors in France,
accounted for only 8% of total investment in 2013 (9% in 2012).
Usually represented by large insurance companies and open-ended
funds, German investors were particularly selective, targeting office
space and mixed-use buildings in Paris business districts
(118 Champs-Élysées acquired by Pramerica). German investors
also showed continued interest in the Lyon market and its highestquality office assets (Anthémis, City One). However, it was the
acquisition by Allianz of 49% of the Altaprime (Altarea) shoppingcenter portfolio, the third-largest transaction of the year in France,
that characterized German investment activity in 2013. The
important role played by Germany in the French market is due as
much to sales as to acquisitions. Funds such as Aberdeen and
Kanam continued their disposals, which supplied other investors
with relatively secure products.
(€270 million).
PURCHASER NATIONALITY in france
KEY INVESTORS
Middle East
6%
Nationalities
French investors were increasingly active in the largest transactions
and provided 65% of total investment in 2013 (57% in 2012). They
accounted for 20 deals of more than €100 million, including some
of the year’s biggest transactions (e.g., Primonial’s acquisition of the
Tour Adria in La Défense for €450 million, and Predica’s acquisition
of éco-Campus in Châtillon for €380 million).
Foreign investors funded 35% of investment in France in 2013,
compared with 43% in 2012. While partly attributable to the
lessening of interest shown by investors from the Middle East
(€860 million in 2013, compared with €2.1 billion in 2012), this
decline is due mainly to the sharp fall in investments from Qatar.
While in 2012 Qatari investors completed four transactions of
more than €100 million (42, 52-60, and 116 bis Champs-Elysées;
Neo-Retiro portfolio), for a total of €1.4 billion, they carried out
only one in 2013 (La Factory in Boulogne).
Americans and Canadians were slightly more active in France in
2013. Because of renewed activity by opportunistic funds, the share
of North American investors rose from 6% in 2012 to 8% in 2013.
Aided by improving market conditions, North American investors
targeted secondary assets and locations: class B logistics platforms
(Logicad portfolio sold to Apollo), and inner-suburbs office space
Asia
4%
North America
8%
Europe
17%
France
65%
% in volume, all products
Investor profiles
Market conditions favored cash-rich buyers with considerable
firepower for portfolio diversification. French and foreign pension
funds and insurance companies also contributed nearly one-fourth
of total investment in 2013 (€3.6 billion).They were the catalysts for
11 transactions of more than €100 million, mainly for large office
complexes (Eco-Campus acquired by Predica) but also for large
retail portfolios (CNP’s purchase from Immochan of seven malls).
9
10. January 2014
A Cushman & Wakefield Research Publication
With investments of €1.8 billion, SCPIs contributed 12% of total investment
in France in 2013, reaffirming their interest in the French market through
office and retail transactions of usually less than €50 million. SCPIs’ 15%
share of total investment in 2012 declined because of the significant rise in
investment by OPCIs (from 6% in 2012 to 15% in 2013), as exemplified by
Primonial’s acquisition of several office assets in Paris and the inner suburbs
(Tour Adria in La Défense, Spark in Paris 13th, etc.).
Property companies contributed 11% of total investment in France in 2013.
Some focused on mixed-use buildings in Paris CBD (acquisition of
50 Haussmann by Terreïs and of 52 rue Marbeuf by Gecina), while others
purchased assets for repositioning such as the Mirabeau tower (Gecina)
and the Val Thoiry shopping center (Eurocommercial Properties), whose
expansion and refurbishment have been scheduled. Yet it was on the sell
side that property companies were most active, whether forced to sell
their assets, taking profit from mature assets, or rebalancing their portfolios
by giving added weight to large, regional shopping centers and high-street
retail. The disposals carried out by property companies provided a flow of
long-term and large-scale assets that are essential for insurance companies
(sale of Passy Plaza to Generali by Eurocommercial Properties) and for
German funds (purchase of 118 Champs-Élysées by Pramerica from
Risanamento, sale of the Issy Trois Moulins shopping center to Union
Investment by Corio).
Sovereign wealth funds (SWFs) were less active in 2013, contributing 8% of
total investment, compared with 20% in 2012—a decline of €1.8 billion.
This performance is not due to a loss of appetite by SWFs for French
property, but rather to the lack of available products that meet their
investment criteria. Some SWFs added to and diversified their positions on
the French market. The Norwegian NBIM, for example, invested in the
industrial sector through a JV with Prologis. Asian newcomers also
reaffirmed their desire to acquire Paris’s most prestigious assets (acquisition
by SOFAZ of 8 Place Vendôme). SWFs may continue to be active in the
coming months because of opportunities created by the sale of large prime
Parisian assets (e.g., the Risanamento portfolio and the Beaugrenelle
shopping center), and because of increasing interest shown by other
nationalities (e.g., Chinese, Malaysian, Korean).
Focus on SCPIs’
The enthusiasm of individual investors for real-estate
investment in France did not flag in 2013, and the SCPI
(French REIT) remained one of the most popular investment
products in France. However, net inflows were down slightly,
and the amounts invested by SCPIs in in real-estate also
declined in 2013 on an annual basis.
In H1 2013, capitalization of the 81 SCPIs specialized in
corporate real estate amounted to €25.09 billion (€23.95
billion in H1 2012), with net inflow of €1.09 billion (11% less
than in H1 2012). This trend fails to describe the marked
differences among the various types of SCPI. Fund inflow to
traditional SCPIs fell by 10.3% in H1 2013 year on year, while
inflows to regional SCPIs rose by 55.1%. Retail-property
SCPIs also experienced sharply lower inflows (-31%).
This trend is indicative of the distribution of amounts
invested in 2013 in the French commercial-property market,
with 67% invested in offices. The most active asset managers
include La Française AM, Amundi, Primonial REIM, BNP
Paribas, and NAMI-AEW Europe.
Sources: ASPIM, IEIF.
8 Vendôme – Paris 1st
10
11. INVESTMENT
A Cushman & Wakefield Research Publication
Geographic distribution
PURCHASER TYPE in france
Private
5%
Owner
occupier
5%
SWFs
8%
Insurance companies/
mutual funds
24%
Property
companies
11%
Investment funds
20%
SCPIs
12%
OPCIs
15%
% in volume, all products
One of the most significant changes in 2013 was the reaffirmation
of interest from opportunistic investors, especially Anglo-Saxons
looking for assets with higher returns. These investors, already
active in the French market at the end of the 1990s, are making a
concerted reappearance and contributed 5% of the total investment
in France in 2013. They also reinvigorated certain areas that had
received little interest in recent years, such as offices in the inner
suburbs (e.g., CACIB headquarters in Courbevoie bought by
Blackstone and River Plaza in Asnières acquired by KKR) and
class B industrial properties (Quartz portfolio purchased by
Blackstone).
Of the €9.7 billion invested in the office sector in France in 2013,
€8.6 billion was invested in Paris and Île-de-France, similar to the
amount invested in 2012 (€8.8 billion).
Investment in inner-Paris office properties (€3.3 billion) declined by
39% year on year and now accounts for only 34% of total investment
in French office properties, compared with 53% in 2012
(€5.3 billion). Despite insufficient supply, the high cost of prime
assets, and the sharp decline in transactions, Paris remains a
preferred destination for many investors from a wide range of
countries and backgrounds. In the central business district—where
€2.3 billion was invested in 2013, compared with €2.9 in 2012—the
most attractive mixed-used and office buildings continue to attract
interest from large insurance companies (Crédit Mutuel Assurances,
with 42 Friedland) and SWFs (Sofaz, with 8 Place Vendôme). Outside
the CBD, only €1 billion was invested, 59% less than in 2012. Few
transactions were made in Paris Centre Est (theVivarte headquarters
were sold to Foncière de Paris in the 19th, Atria was sold to Unofi in
the 10th) or in Paris Rive Gauche. Both markets offered far less
supply than in 2012. The largest deals were seen in the 15th district,
which has the most office stock in Paris outside the CBD. Total
volume was increased by sales from the sector’s largest tenants
(90 boulevard Pasteur, sold by Crédit Agricole, and part of the
Ponant building, sold by BPCE) and by acquisitions of large
refurbished complexes recently let (Tour Mercure, sold to Aviva).
Activity was also boosted by investors focused on adding value to
certain assets (Tour Mirabeau, sold to Gecina).
OFFICES
Amounts invested
Total investment in the office sector in France amounted to
€9.7 billion in 2013, close to the volume recorded in 2012 but 15%
less than the ten-year average (€11.4 billion). The only asset class
not to have grown year on year, offices accounted for only 64% of
investment in 2013, compared with 67% in 2012 and a ten-year
average of 74%. Impacted by the poor performance of the rental
market and by the significant rise in vacancy rates in certain sectors,
the office market was further penalized by strategies of investors
aiming to rebalance their portfolios by overweighting retail
properties. The office market also suffered from the lack of
availability of prime products in the most sought-after districts.
29 avenue de l’Opéra– Paris 1st
11
12. January 2014
A Cushman & Wakefield Research Publication
The slowdown in Paris was partially compensated for by recovery
in the inner suburbs, where the rebound was especially strong in
the Hauts-de-Seine. Volume rose by 77% year on year, thanks to
the success of several key tertiary sectors. La Défense turned in its
best performance (just under €1 billion invested in 2013) since the
beginning of the economic crisis, with two large transactions of
more than €200 million each: the acquisition by Primonial Reim of
the Tour Adria for €450 million and the acquisition for
€228 million of the Tour Pacific by Tishman Speyer for a Canadian
investor. The southwestern suburbs and the western business
district (WBD) were also active. Investment volumes benefitted
from a few very large transactions (acquisition by Hines, for Korean
investors, of Sequana in Issy-les-Moulineaux for €315 million), from
the acquisition of second-tier buildings with secure long-term
leases (Alpha in Boulogne, Verdi in Issy-les-Moulineaux, Andriscos
in Neuilly-sur-Seine), and from several large sales of new office
space to occupiers (Qatar Sports Investment in La Factory and
Boursorama in You, in Boulogne; the Conseil général des Hauts-deSeine in Arena 92).
market opening to the benefit of the inner suburbs, several
transactions were completed for new or recent less secure
buildings (Perspective Défense in Colombes).
Investors were less drawn to provincial French markets, except for
the Rhône-Alpes region, where annual investment (€720 million)
rose by 30% and accounted for 69% of total office investment
outside Île-de-France. Driven by the steady demand from French
and German investors for new and recent office stock and by the
momentum of its lettings market (more than 200,000 sq. m. let in
2013), the Lyon region accounted for 11 of the 16 transactions
larger than €20 million outside Paris and Île-de-France in 2013
(Silky in Villeurbanne, Anthémis in Lyon).
OFFICE INVESTMENT ACTIVITY IN France (€ BN)
9.7
2003
0
10.0
20%
12.3
4
6.7
40%
5.3
8
10.3
60%
19.5
12
18.2
80%
14.0
16
10.2
100%
8.0
20
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Office investments (€bn)
0%
% of sums invested in offices in France
Deals larger than €100 million also stimulated less established
markets in the Hauts-de-Seine and other départements of the
inner suburbs. Investment volume grew year on year in the
northern and southern suburbs, where there is high-quality new
and recent stock. While Predica’s purchase of the new Orange
campus in Châtillon accounted for 42% of total investment in the
southern suburbs, activity was more balanced in the northern
suburbs. The cost-efficient northern suburbs were the site of eight
deals larger than €50 million in 2013 (none in 2012), including the
acquisition by BNP Paribas Cardif of Jade in Saint-Denis and the
acquisition of Porte du Parc in Saint-Ouen by Primonial Reim. This
area has now had several years of successful leases. With the office
12
50 boulevard Haussman - Paris 9th
13. INVESTMENT
A Cushman & Wakefield Research Publication
EXAMPLES OF OFFICE ACQUISITIONS IN 2013
PROPERTY
LOCATION
VENDOR
PURCHASER
Portfolio
île-de-France
Les Docks Lyonnais
ADIA
Adria tower
La Défense (92)
Testa
éco-Campus
Châtillon (92)
Sequana tower
PRICE (€ M)
AREA (SQ. M.)
580 (est.)
111,000
Primonial Reim
450
54,000
Nexity, Interconstruction
Predica
380
72 000
Issy-les-Moulineaux (92)
Les Docks Lyonnais
Hines (Koreans)
315
42,000
33 Lafayette
Paris (75009)
Ivanhoe Cambridge
Deka
277
28,800
Pacific tower
La Défense (92)
Ivanhoe Cambridge
Tishman Speyer
228
52,900
Technopole
Meudon-La-Forêt (92)
Commerz Real
SMABTP
215
54,300
Nuovo
Clichy (92)
Nexity
BNP Cardif / Sogecap
190
35,000
CACIB hq
Courbevoie (92)
Crédit Agricole SA
Blackstone
188
44,000
Mirabeau tower
Paris (75015)
Aberdeen
Gecina
186
30,300
Jade
Saint-Denis (92)
Kanam
BNP Cardif / Sogecap
170
38,500
Spark
Paris (75013)
Emerige, AOG
Primonial Reim
162
21,700
42 Friedland
Paris (75008)
Ivanhoe Cambridge
Crédit Mutuel Assurances
162
10,500
50-52 boulevard
Haussmann
Paris (75009)
Generali
Terreis
138
14,900
Okabé
Le Kremlin-Bicêtre (94)
Altarea-Cogedim
Primonial Reim
121
23,400
River Plaza
Asnières-sur-Seine (92)
Aberdeen
KKR
89
26,700
Anthemis
Lyon (69)
DeAWM
Realis
85
20,000
RETAIL
Amounts invested
Investment in French retail assets in 2013 amounted to €4 billion,
11% more than in 2012, which had been an outstanding year. The
highest since 2007, this amount represents 26% of total investment
in France, compared with an annual average of 17% during
2003-2012.
The relatively high number of transactions of more than €100
million was due to an influx of quality supply to the French retail
market, which attracted foreign funds and large French institutions.
Twelve deals of more than €100 million accounted for 51% of total
investment in French retail assets in 2013. Several single-asset
transactions were completed, but it was portfolio disposals and
sale-and-leaseback transactions that accounted for 40% of total
investment in retail assets in 2013. The market was also driven by
numerous transactions of less than €50 million carried out both in
the city center and in the suburbs by SCPIs (BNP Paribas Reim,
Amundi, Primonial Reim, etc.).
Nonetheless, the solid performance of retail markets did not mask
a two-tier phenomenon in the French market. Investors continue
to compete for large regional shopping centers, prime retail
locations on the most famous thoroughfares, and assets with
significant potential for repositioning. On the other hand, obsolete
assets and secondary sites have been impacted by the downturn in
household consumption and by drawn-out and tougher leasenegotiation tactics by retailers. The rapid development of
e-commerce and competition from large, modern shopping
complexes also widen the gap in the French market.
Asset types
Investment in high streets amounted to €1.6 billion (i.e., 39% of
total investment in retail assets), a decline of 13% year on year
attributable to fewer large transactions. Two transactions larger
than €300 million and totaling €825 million were recorded in 2012
(e.g., 52-60 Champs-Élysées, acquired by Qatar for more than
€500 million), while the largest deal of 2013 was the acquisition for
€260 million of 65-67 Champs-Élysées, a mixed-use building that
13
14. January 2014
A Cushman & Wakefield Research Publication
RETAIL INVESTMENT ACTIVITY IN France (€ BN)
100%
4.8
5
80%
60%
40%
1.2
0.8
1
20%
1.2
1.9
1.9
2.3
2
3.6
3
3.3
3.6
4.0
4
0%
0
2003
2004
2005
2006
Retail investments (€bn)
2007
2008
2009
2010
2011
2012
2013
% of sums invested in retail in France
houses the Nike and Tommy Hilfiger flagships. In order to enhance
their image or begin development in France, the largest international
groups focused on the main thoroughfares of Paris and other major
French cities, where the bulk of high-street market activity occurred.
In Paris, several large transactions reaffirmed the allure of the
Champs-Élysées (65-67, 118, the Levis and Tissot flagships at 76-78)
and of luxury boutiques (Dsquared² and Ports 1961 in the Mandarin
Oriental, Tiffany & Co. and Harry Winston at 6 rue de la Paix, and
Dior and Mikimoto at 8 place Vendôme). Elsewhere in France, 2013
was noteworthy for the acquisition by Vastned of a portfolio of six
stores (Louis Vuitton, Nespresso, etc.) located on the Cours de
l’Intendance and the Rue de la Porte Dijeaux, two of Bordeaux’s
busiest thoroughfares.
Malls and shopping centers accounted for 37% of total investment
in retail properties in 2013 (€1.5 billion), 15% more than in 2012.
This solid performance was due mainly to the sale of relatively
modern regional shopping centers that were recently refurbished
(or whose refurbishment is under way), such as Odysseum in
Montpellier, Val Thoiry in Thoiry, and Espace Gramont in Toulouse.
Investors are especially interested in these products because of
their high long-term yields, low vacancy rates, and, for some assets,
high potential for revaluation. Disposals of smaller but highperforming complexes in Paris (Passy Plaza, Bercy Village, Gare de
l’Est shopping center) also contributed to activity. In addition,
neighborhood shopping is another market segment that has held up
during the economic crisis, as confirmed by several acquisitions of
shopping malls and by the sale of two portfolios by Immochan and
Mercialys to CNP and Amundi.
Total investment in retail warehousing in 2013 rose sharply, by 91%
year on year, to €980 million. However, these volumes were inflated
by large sale-and-leaseback transactions. For example, Vivarte sold
89 outlets to La Française AM for €185 million, and Metro Cash &
14
Carry sold 43 outlets to Hermes Reim for €178 million. Because of
investor discretion and the limited number of high-quality assets on
the market, transactions for other asset types in the outer suburbs
were relatively rare. Investors showed a natural preference for
existing supply located in the center of large retail zones and
benefiting from the presence of well-known retailers (Parisis Park at
La Patte d’Oie in Herblay).
Passy Plaza – Paris 16th
15. INVESTMENT
A Cushman & Wakefield Research Publication
EXAMPLES OF RETAIL ACQUISITIONS IN 2013
TYPE
PROPERTY
LOCATION
VENDOR
PURCHASER
PRICE
(€M)
AREA (SQ.
M.)
Shopping centre
Altaprime portfolio (49%)
France
Altarea-Cogedim
Allianz
395
155,800
High street retail
65-67 Champs-élysées*
Paris (75008)
Shaftesbury AM
Thor Equities
260
10,200
Sale and leaseback
Vivaldi portfolio
France
Vivarte
La Francaise AM
185
53,700
High street retail
Opéra Capucines*
Paris (75002)
Ofi Reim
Generali
178
10,600
Sale and leaseback
Metro Cash & Carry
portfolio (75%)
France
Metro Properties
Hermes REIM
178
-
Gallery/Retail park
Sanba portfolio
Provinces
Immochan
CNP
160
48,000
Shopping centre
Passy Plaza
Paris (75016)
Eurocommercial
Properties
Generali
141
8,100
High street retail
8 place Vendôme*
Paris (75001)
Axa Real Rstate
SOFAZ
135
5,400
High street retail
118 Champs-élysées*
Paris (75008)
Risanamento
Pramerica
135
3,800
Shopping centre
Val Thoiry
Thoiry (01)
Vastned
Eurocommercial Properties
105
23,400
High street retail
76-78 Champs-élysées
Paris (75008)
Archon
AG Real Estate
83
3,100
High street retail
43 boulevard des Capucines*
Paris (75002)
Crédit Foncier
Invesco
74
4,900
High street retail
2 flagships at Mandarin
Oriental hotel
Paris (75001)
Société Foncière
Lyonnaise
Mandarin Oriental Hotel
Group
73
1,300
Factory outlet
Marques Avenue
Romans-surIsère (26)
CBRE Global
Investors
AEW Europe (Nami)
51
17,000
High street retail
SPIIC portfolio
Bordeaux (33)
Private
Vastned
47
3,250
Retail park
Parisis Park
Franconville (95)
Henderson
Global Investors
Cordea Savills
40
8,900
* mixed-use asset
INDUSTRIAL
Amounts invested
80%
3.2
3
2.6
60%
2.1
2
1
1.5
1.3
1.5
40%
2009
2010
0.8
0.7
20%
0.6
Investment in logistics was boosted in 2013, as in 2012, by portfolio
disposals.The joint venture between Prologis and NBIM and Icade’s
sale of its Logicad portfolio to Apollo accounted for 37% of logistics
investments in 2013. In addition, sales of individual assets were
more numerous in 2013 than in 2012, with 12 transactions larger
100%
4
0.8
The logistics market comprises the bulk (77%) of the industrial
market, because of steady demand for new platforms developed for
large in-house logisticians and logistics providers, and of more
recent interest shown for class B assets. Logistics thus represents
a growing source of diversification for large foreign institutional
investors (NBIM, AG Real Estate), and an attractive investment for
pure players (Argan, Goodman) and certain opportunistic funds
(Blackstone, Apollo).
INDUSTRIAL INVESTMENT ACTIVITY IN France (€ BN)
0.9
Investment in industrial assets in France in 2013 amounted to
€1.5 billion, or 10% of total investment in France. This annual rise
of 15% continued a positive trend that began in 2009 (€606 million).
0%
0
2003
2004
2005
2006
2007
Industrial investments (€bn)
2008
2011
2012
2013
% of sums invested in industrial in France
15
16. January 2014
A Cushman & Wakefield Research Publication
Île-de-France and the rest of France is sometimes substantial. The
Paris region represented only 30% of total logistics investment in
2013, while the provinces accounted for 70%, mainly because of
disposals of large portfolios and market activity in Lyon, Lille, and
Marseille.
than €20 million in 2013, compared with nine the previous year.
This increase reflects the success of large turnkey projects, whose
rapid growth meets the cost-cutting and modernization
requirements of in-house logisticians in the retail-distribution
sector. The acquisitions of two platforms larger than 100,000 sq. m.
in Saint-Martin-de-Crau, one leased to Maisons du Monde and sold
to Tristan Capital Partners and the other developed for Castorama
and sold to AG Real Estate, were two of the most significant
transactions in 2013. AG Real Estate also acquired a 60,000 sq. m.
site built for Darty in Pusignan, near Lyon. These transactions
illustrate the premium paid by investors for the four principal
markets on the north-south axis (Lille, Paris, Lyon, and Marseille),
which remain the most desirable locations for occupiers because
of their proximity to large consumer populations, major roads, and
transport infrastructure. The difference in performance between
Light industrial premises accounted for a more modest number of
large transactions, although a portfolio larger than €100 million
was sold on the French market in 2013, raising to 23% the
proportion of this asset class’s contribution to total industrial
investment. A few sale-and-leaseback transactions also drove the
market. The largest was the sale for €60 million by Bouygues
Telecom to Digital Realty of three data centers located in Île-deFrance.
EXAMPLES OF INDUSTRIAL ACQUISITIONS IN 2013
TYPE
PROPERTY
LOCATION
VENDOR
PURCHASER
PRICE
(€M)
AREA (SQ.
M.)
Logistics
Joint-venture
France
Prologis
NBIM
272
544,000
Logistics
Logicad portfolio
Provinces
Icade
Apollo
145
370,000
Light
industrial
Spring portfolio
France
Axa Reim
Northwood Investors
123
266,000
Logistics
Castorama turnkey scheme
Saint-Martin de Crau
(13)
PRD
AG Real Estate
62
110,500
Light
industrial
3-property data center
portfolio*
Île-de-France
Bouygues Telecom
Digital Realty Trust
60
8,000
Logistics
Maisons du Monde turnkey
scheme
Saint-Martin de Crau
(13)
Groupe Carnivor
Tristan Capital
Partners
56
114,500
Logistics
Amazon turnkey scheme
Lauwin-Planque (59)
Goodman
Princeton/Chambers
Street
52
88,000
Logistics
Quartz portfolio
Île-de-France
Morgan Stanley
Blackstone
37
75,300
Logistics
Platform
Le Coudray-Montceaux
(91)
Panhard Developpement
Argan
37
52,400
Logistics
Darty turnkey scheme
Pusignan (69)
Vailog France
AG Real Estate
34
59,200
* Sale and leaseback
16
17. Investment
A Cushman & Wakefield Research Publication
YIELDS
Prime yields were relatively stable in 2013. Because of the inherent
competition among investors for mixed-use buildings, yields
remained low to very low for the most iconic assets.Yields of a few
emerging sectors in the inner suburbs also experienced downward
pressure. The northern suburbs, for example, had little supply of
opportunities and were in high demand by occupiers. However,
because of the possibility of higher long-term yields and investors’
desire to maintain a consistent risk premium, prime yields should
be stable in the months ahead.
Yields for the highest-quality office assets in the Paris CBD came to
4.25%. Paris shops yielded around 3.75%, while high-end office
properties in La Défense yielded 6%. Certain parts of the western
suburbs, particularly Péri-Défense and Boucle de Seine, recorded a
rise of 25 basis points year on year because of a deterioration of
the lettings market. In Lyon, prime yields for office assets fell to less
than 6%, and came to approximately 7.25% for prime logistics
assets.
PRIME YIELDS IN France %
JANUARY 2013
JANUARY 2014
Paris (CBD)
4.50
4.25
Provinces (Lyon)
6.00
5.90
Shops
4.00
3.75
Shopping centres
5.00
5.00
Retail parks
6.25
6.00
Logistics
7.30
7.25
Light industrial
8.50
8.25
AVERAGE
5.94
5.77
OFFICES
RETAIL
INDUSTRIAL
OUTLOOK FOR THE INVESTMENT MARKET
The year 2013 confirmed the robustness of the French investment
market for office property, a trend expected to continue in 2014.
Although a lack of fiscal visibility and weakening lettings markets
may slow business, the overall investment volume should be higher
in 2014 than in 2013. Several large and very large transactions are
near completion, a reflection of the ample available cash and strong
appetite of long-term institutional investors (insurers, SWFs) for
core assets. Even assets that are less secure will benefit from efforts
made by sellers and interest shown by opportunistic investors,
thereby confirming the French market’s capacity to attract a wide
variety of investors.
4 place de l’Opéra – Paris 2nd
17
19. 02
îLE-DE-FRANCE OFFICE
MARKET
”
Although GDP rose slightly in 2013, the large number of corporate bankruptcies
and ongoing job destruction affirm that the French economy is far from recovering.
The morose business climate has prompted many companies to renegotiate their
leases instead of vacating, with a depressing effect on take-up in 2013 (down
17% from a year earlier). Transactions greater than 4,000 sq. m.—the usual market
staple—were few and far between. This downturn further added to the net
increase in available stock, already swollen from the steady production of new and
redeveloped properties and from releases of office stock ill adapted to corporate
requirements for cost-cutting and modernization.
Take-up in Île-de-France (sq. m.)
3 000 000
3 000 000
2 500 000
2 500 000
2 000 000
2 000 000
1 500 000
1 500 000
4 000
4 000
2 791 622
2 791 622 2 656 443
2 656 443
2 049 452
2 049 452
1 937 638
1 937 638
1 742 328
1 742 328
2 114
2 114
2 317
2 317
3 306
3 306
2 893
2 893
2 357 403
2 357 403
2 784
2 784
1 752 665
1 752 665
2 314
2 314
3 000
3 000
2 098 351
2 098 351
2 091 864
2 091 864
2 498
2 498
3 500
3 500
2 321 082
2 321 082
1 743 102 2 500
1 743 102 2 500
2 590
2 590
2 271
2 271
2 264
2 264
2 033
2 033
1 500
1 500
1 000 000
1 000 000
51%
51%
500 000
500 000
2 000
2 000
46%
46%
44%
44%
43%
43%
2003
2003
2004
2004
2005
2005
42%
42%
11 000
000
49%
49%
45%
45%
51%
51%
45%
45%
50%
50%
2011
2012
2012
41%
41%
0 0
500
500
00
Take-up (sq. m.)
Take-up (sq. m.)
2006
2006
2007
2007
2008
2008
2009
2009
Take-up > 4,000 sq. m. (share in %)
Take-up > 4,000 sq. m. (share in %)
2010
Number of transactions
transactions
2013
2013
20. January 2014
A Cushman & Wakefield Research Publication
THE îLE-DE-FRANCE OFFICE SUBMARKETS
Southwestern Suburbs
Southern Suburbs
Roissyen-France
Eastern Suburbs
A1
Western Business District (WBD)
Tremblay-
Boucle de Seine
Northern Suburbs
A104
en France
Gonesse
A15
Paris Rive Gauche
Paris CBD
Aulnaysous-Bois
A86
Paris Centre Est
Gennevilliers
Bezons
La GarenneColombes
A14
Le
Bourget
Drancy
A1
St-Ouen
Bobigny
XVIII
XVII
XIX
SaintCloud
A12
Le PréSt-Gervais
Les Lilas
II
e
ein
III
I
VII
IV
Vincennes
StMandé
Issy-les
Moulineaux
Sèvres
A86
Meudon
V
XV
Billancourt
NeuillyPlaisance
Montreuil
XX
XI
VI
Boulogne-
Rosnysous-Bois
A3
Bagnolet
X
VIII
S
La
A86
Paris
Suresnes
XVI
Aubervilliers
Pantin
LevalloisPerret
La
Défense Neuillysur-Seine
Puteaux
IX
RueilMalmaison
A3
A86
La Courneuve
St-Denis
Clichy
Courbevoie
Nanterre
VilleneuvelaGarenne
AsnièressurBoisColombes Seine
Colombes
Villepinte
Le BlancMesnil
La Défense
Fontenaysous-Bois
B
XIV
XIII
rd
Pér
iphé
riq
Malakoff Montrouge ue
Gentilly Le
Kremlin
Arcueil Bicêtre
Châtillon
Bagneux
Cachan
Noisy-leGrand
Nogentsur-Marne
XII
Vanves ouleva
Neuilly-surMarne
Charentonle-Pont
Champignysur-Marne
Ivry-sur-Seine
A4
Villejuif
A6
A86
OCCUPIER DEMAND
A total of 1,743,102 sq. m. of office space was let or sold to
occupiers in 2013, a decline of 17% from the previous year
(2,098,351 sq. m.) and 20% below the ten-year average
(2,179,885 sq. m.). The continual fall in the number of
transactions—2,033 in 2013, down from 2,271 in 2012 and 2,590 in
A6
2011—does not fully explain the poor performance of the Île-deA10
France office market in 2013, which is attributable mainly to a
dearth of large transactions.There were only 66 transactions larger
than 4,000 sq. m. in 2013, compared with 90 on average every year
during the period 2003–2012. The total amount of take-up also fell
20
significantly. With 717,592 sq. m. let in 2013, compared with
1,044,379 sq. m. in 2012 (-31%), large transactions accounted for
only 41% of total take-up, compared with 50% the previous year.
Large turnkey transactions, which boosted take-up in the period
2009–2012 (Crédit Agricole at Evergreen in Montrouge, Thalès in
Gennevilliers, Carrefour in Massy, SFR in Saint-Denis, and Orange
in Châtillon), were especially rare.
However, the share of new and redeveloped buildings in total takeup of properties larger than 4,000 sq. m. rose to 73% (67% in 2012).
Attributable to availabilities in new large office complexes on the
market (SAP in So Ouest in Levallois-Perret, Orange in Eastview in
21. offices
A Cushman & Wakefield Research Publication
Bagnolet, etc.), this increase also stresses the success of new urban
property-development sectors, such as ZAC Paris Nord-Est in Paris
(Rectorat de Paris in the Visalto), or Le Trapèze in BoulogneBillancourt (Boursorama in You, BBDO in Ardeko, PSG in La
Factory). Some of these large development projects helped sustain
the market for sales to occupiers, at a time when there was a sharp
fall in the volume of office stock acquired by SMEs.The total surface
area transacted in owner-occupier sales was therefore 12% below
the ten-year average. Despite interest rates at historic lows and an
economic environment that highlights the safe-haven value of
property, SMEs continued to play a game of wait-and-see, partly
because of constant financial duress and partly because of more
difficult negotiations between buyers and sellers.
Trends in take-up (> 4,000 sq. m.) according to
reason for relocating
Paris were less common. In order to transfer some of its Paris
employees to Saint-Denis, SNCF moved operations to City One
and Innovatis 2 in 2012, and to Le Monet in 2013.
Transactions in 2013 in Île-de-France thereby confirmed the
importance of real estate as a driver for organizational and
managerial efficiency, aside from the sole consideration of the cost
of each work station. Systematic analysis of team productivity,
corporate image, and proximity to customers are now used to
make the most of a relocation and to mitigate any hidden costs.
Given the power of unions and employees’ higher expectations of
their working environment, social factors are closely examined.
This explains the importance given to the comfort of the workplace,
the quality of the surrounding neighborhood, and convenience of
public transport.
Trends in take-up (> 4,000 sq. m.) according to
rent
1% 1%
10%
Consolidations
45%
11%
Cost Cuttings
9%
150-249 €/sq.m.
Extensions
43%
Merger/Demerger
250-349 €/sq.m.
19%
33%
Other
450-549 €/sq.m.
28%
Nearly all transactions in 2013 confirmed the vital importance that
occupiers place on cutting their property costs. Consolidation and
cost-cutting operations— implemented by large groups concerned
about maintaining their profitability—accounted for 88% of total
take-up greater than 4,000 sq. m. in 2013, compared with 89% in
2012.
Several companies reduced the number of sites occupied, trading
them for large new or redeveloped properties (Orange in Bagnolet,
General Council of the Hauts de Seine département in Nanterre,
SAP at So Ouest in Levallois-Perret) or secondhand supply that
allowed them to maintain a Paris address while optimizing costs
(Keolis at 20–22 rue Le Peletier in Paris 9th). A few occupiers even
consolidated operations in order to move closer to the center of
the Paris conurbation (e.g., SCA Hygiene Products in Eurosquare 1
in Saint-Ouen). Companies moving further away from the center of
350-449 €/sq.m.
>550 €/sq.m.
In 2013, transactions in the €250–349 / sq. m. / year bracket
accounted for most lettings larger than 4,000 sq. m. in Île-de-France
(33%, compared with 38% in 2012). As in 2012, this high proportion
testifies to the success of cost-efficient markets that offer good
value for money and provide convenient accessibility. Occupiers
preferred recent and refurbished buildings in certain municipalities
of the Hauts-de-Seine département near La Défense (EDF in Le
Carillon in Nanterre,Technip in Newside in La Garenne-Colombes).
The importance of this price bracket also ensured success for the
best offers of the northern suburbs, whether for new office space
(SNCF in Le Monet and the Haute Autorité de Santé in Green
Corner in Saint-Denis) or for high-quality refurbished office space
(SCA Hygiene Products in Eurosquare 1 in Saint-Ouen).
21
22. January 2014
A Cushman & Wakefield Research Publication
reached €700 / sq. m. / year in 2013, a first since 2005. At the other
extreme, transactions smaller than €249 / sq. m. / year were also
fewer than in the previous year, a sign of flat rental activity in the
most far-flung areas of the Paris conurbation. Occupiers have also
lost interest in secondhand supply in less well-established areas of
the inner suburbs.
Trends in take-up according to geographic
sector between 2012 and 2013 (%)
23 %
8%
Comprising only 11% of total transactions larger than 4,000 sq. m.
in 2013 (9% in 2012), the proportion of transactions larger than
€550 / sq. m. / year remained insignificant. This modest share is less
a reflection of occupiers’ loss of interest in more upscale assets than
a consequence of a very small number of large deals completed at
this price level (five in 2013, compared with 10 in 2012 and 12 in
2011) and a shortage of quality supply in the most desirable areas of
Paris. Although lettings by Hermès of 10–12 rue d’Anjou in the 8th
district and by CMS Bureau Francis Lefebvre of 2–8 rue Ancelle in
Neuilly-sur-Seine helped reaffirm the value of the highest-quality
assets in Paris and the WBD, no transactions larger than 4,000 sq. m.
22
-10 %
Northern suburbs
-13 %
Paris Rive Gauche
La Défense
Other
-8 %
Eastern suburbs
WBD
-5 %
Southern suburbs
Paris CBD
Paris Centre Est
Southwestern suburbs
Nevertheless, the most significant change in 2013 was the
proportionate rise of transactions in the €350–449 / sq. m. / year
bracket, which increased from 22% in 2012 to 28% in 2013. This
growth was due to transactions by occupiers aiming to reduce their
property costs while maintaining a central address: Paris government
administrations required to remain in town (Rectorat de Paris in Le
Visalto, ANR at 50 avenue Daumesnil) and, in the southwestern
suburbs, companies aiming to expand within their original sector or
adjacent sectors (Sagem in Arcs de Seine and Atlantis TV in the
Alpha in Boulogne). Yet transactions in the €350–449 / sq. m. / year
bracket increased mainly for lettings of large refurbished properties
in La Défense (EDF with 21,481 sq. m. in the Tour Blanche, Fidal with
13,628 sq. m. in the Tour Prisma). Such lettings provide occupiers
with an address in a major business district as well as highperformance buildings at a more moderate price.Transactions in the
€450–549 / sq. m. / year bracket rose for the same reasons.
Occupiers in major sectors in the western suburbs were able to
modernize their properties while lowering costs (e.g., lettings of
large new and redeveloped stock by SAP at So Ouest in LevalloisPerret and by Coca-Cola at Noda in Issy-les-Moulineaux).
Boucle de Seine
5%
Alegria – Neuilly-sur-Seine (92)
-28 %
-39 %
-40 %
-48 %
Take-up in 2013 in inner Paris was 11% less than in 2012 and well
under (-21%) the ten-year average.The total number of transactions
larger than 4,000 sq. m. in Paris reached a low not seen since 2008,
an indication of the challenges facing SMEs and the tendency of large
occupiers to renegotiate their leases instead of vacating. Above all,
this trend reveals the effects of the scarcity of available new and
redeveloped supply. Occupiers in the most prestigious
neighborhoods seized upon the few available redevelopment
projects, thereby improving their comfort and reducing occupancy
costs while retaining a desirable address (Hermès at 10−12 rue
d’Anjou, DS Avocats in Six’In). Other companies wishing to remain
in or move to Paris opted for quality secondhand stock (Keolis at
20−22 rue Le Peletier) or redeveloped office space in less central
and less expensive neighborhoods within the CBD (DDB at
73−75 rue La Condamine). Several large development projects
were also carried out in new areas (Paris Nord Est, ZAC ClichyBatignolles). The prime beneficiaries were large public institutions
(e.g., Rectorat de Paris, Tribunal de Grande Instance), which were
able to lower their real estate costs. Such operations buffered the
decline in take-up in Paris and stood in contrast with the limited
number of solutions offered by the traditional business districts.
23. offices
A Cushman & Wakefield Research Publication
The southwestern suburbs were the only submarket of the inner
suburbs to see a rise in take-up (+23%). Several transactions
reaffirmed the success of new tertiary sectors (Le Trapèze in
Boulogne-Billancourt, the Bords de Seine neighborhood in Issy-lesMoulineaux). Occupiers seized lettings opportunities in new
property developments to modernize their offices (e.g., Coca-Cola
in Noda, Boursorama in You, BBDO in Ardeko). The southwestern
suburbs continued to command strong loyalty. They also proved
attractive to Paris-based companies confronted with scarce supply
of quality assets and eager to lower property costs without overly
compromising their image.
Other markets in the western suburbs were flat. La Défense had its
worst year in a decade, with just 96,509 sq. m. let in 2013. Usually
driven by lettings of large and very large properties, La Défense was
hurt by the very small number of deals larger than 4,000 sq. m. (four,
and only one greater than 20,000 sq. m.). La Défense was also
penalized by the lack of lettings of new and redeveloped supply.
Large tenants saved money by agreeing to measures granted by
landlords to minimize the vacancy rates of their properties. Of total
take-up in 2013, 82% was for refurbished buildings. Occupiers were
thus able to modernize their buildings at relatively low cost (Fidal in
the Tour Prisma, EDF in the Tour Blanche, Egencia in the Tour Egée).
In contrast with trends observed at La Défense, the success of new
stock helped to cushion the fall in demand in the WBD. Five leases
were signed for new buildings larger than 10,000 sq. m., including
CMS Bureau Francis Lefebvre 2−8 rue Ancelle in Neuilly, SAP in So
Ouest, and CG 92 in Arena 92.
Area Prima – Châtillon (92)
In 2013, other sectors of the inner suburbs played a less active role
than in recent years, despite an economic context that favored costcutting initiatives by occupiers. The downturn of cost-efficient
markets should be put into perspective, and is no doubt related to
the decline of certain business sectors and to fewer large and very
large transactions. Despite a decline in the number of new large
properties available—the result of successful lettings in 2011 and
2012—the northern suburbs continued to see large new leases in
Saint-Denis (SNCF in Le Monet and the HAS in Green Corner),
Saint-Ouen (SCA Hygiene Products in Eurosquare 1, SVP in Dock
en Seine) and in other communes of the Seine-Saint-Denis
département (DHL in Le Mermoz in Le Bourget).
Trends in take-up (> 4,000 sq. m.) according to
business sector
5%
13%
Public sector
25%
Banking-Insurance
Communication
Advisory
22%
Manufacturing-Distribution
25%
6%
4%
IT
Services
The public sector, banking and insurance, and manufacturing and
distribution continued to dominate activity in 2013 and accounted
for 72% of total take-up greater than 4,000 sq. m. in Île-de-France,
compared with an average of 71% for the period 2003−2012.There
were, however, large differences in performance among the sectors.
The most significant change concerned the manufacturingdistribution sector, whose decline was triggered by a sharp fall in
transactions of more than 4,000 sq. m. (16 in 2013, compared with
43 in 2012) and by the absence of large turnkey operations that had
boosted volume in recent years (Thalès in Vélizy in 2012, Carrefour
in Massy, and Thalès in Gennevilliers in 2010). Consequently the
sector represented only 155,581 sq. m. let or sold to occupiers in
2013 (22% of total take-up), compared with 447,596 sq. m. in 2012
(43%)—a significant difference explained partly by the downturn in
large transactions in Île-de-France in general and by the mixed
results of several business sectors in the inner and outer suburbs.
With 171,113 sq. m. let or sold in 2013, the proportion of bankinginsurance occupiers rose from 15% in 2012 to 25% year on year, a
similar level to that of the public sector. However, the sector’s
dominant position—its first since the beginning of the financial
crisis—was the result mainly of the decline of the manufacturingdistribution sector. Therefore volume let by occupiers in banking
and insurance remained largely under the ten-year average
(245,118 sq. m.). Although the weakening economic climate
continues to slow large French banks, it has encouraged some of
them to accelerate cost-cutting measures. For example, at the same
time that Crédit Agricole announced the closing of over 50 of its
23
24. January 2014
A Cushman & Wakefield Research Publication
agencies in Île-de-France by 2015, the bank expanded its campuses
in Montrouge and Guyancourt. The construction of two new
buildings (Eole and Alsace) will allow Crédit Agricole to
accommodate a greater number of its employees in these buildings
and to share numerous services and facilities. In contrast with the
trend in the financial sector of relocating employees to the suburbs,
insurance companies and private health insurers stood out by
taking the opposite tack and moving back into Paris (acquisition by
the Fonds de Garantie of a stake in the Trio Daumesnil project).
RENTAL VALUES
Trends in prime rental values according to
geographic sector (€ / sq. m. / year)
900 €/m²
2012
823
800 €/m²
2013
753
679 680
700 €/m²
600 €/m²
514
500 €/m²
498
488
417
464 463
417 429
400 €/m²
357
315 310
300 €/m²
310
277
292
294
257
200 €/m²
100 €/m²
0 €/m²
Le Garance – Paris 20th
Just as the banking-insurance sector had done, the public sector
benefited from the decline of the manufacturing-distribution sector
to raise its share in total take-up of properties larger than 4,000 sq.
m. each (25% in 2013, compared with 16% in 2012), despite the
total surface area let being similar to that of 2012. Seven transactions
for properties greater than 4,000 sq. m. each were recorded in
Paris, including the Banque Publique d’Investissement at 6−8
Haussmann, which together mitigated the decline of take-up in
Paris. The few transactions outside Paris were mostly in SaintDenis, where the SNCF further lowered its property costs by
letting Monet (after letting Innovatis 2 and City One in 2012), and
where HAS let 12,400 sq. m. in Green Corner. In addition, the
Conseil Général des Hauts-de-Seine acquired 31,000 sq. m. in
Nanterre as part of the Arena 92 project, whose purpose is to
regroup employees currently working at several sites in Nanterre.
The project is expected to be completed by 2016. Municipal
elections in 2014 will probably lower the number of new
transactions from the local governments. On the other hand,
several development projects may accelerate the French State’s
cost-cutting policy, thereby helping to realize its objectives for
lower public spending.
Paris CBD
Paris Rive
Gauche
La Défense
WBD
Southwestern Paris Centre
suburbs
Est
Northern
suburbs
Southern
suburbs
Boucle de
Seine
Eastern
suburbs
Prime rental values in Île-de-France stood at €753 / sq. m. / year on
December 31, 2013, 10% lower than a year earlier because of the
small number of transactions for prime Paris assets. The scarcity of
high-quality supply worsened over the year, forcing occupiers in
professions with high added value (e.g., luxury goods) to pay top
prices if they wanted to seize the last opportunities available in
Paris’s most desirable districts (Christian Dior in Capital 8). The
test will be the letting of the most expensive assets (1 Euler, 3−5
Friedland) in the Etoile district—where there is usually very little
supply—which may mark the beginning of a return to levels of
rental values seen in recent years.
Yet the market for prestigious assets is far from representative of
the trends observed in the rest of Île-de-France, where a diversity
of rental values is still the rule. Values may vary widely within the
same tertiary sector, depending on a given building’s location, its
fundamental quality, and the owner’s letting strategy. As a general
rule, incentives have played a critical role in tenant-landlord
relations, with landlords granting more generous rent-free periods.
Occupiers are able to use negotiation tactics to their advantage,
widening the gap between headline rents and economic values.
Some landlords displayed increasing flexibility in order to retain
their tenants. This tendency resulted in a more widespread
adoption of ILAT1 and in the renegotiation of numerous leases.
Without a firmer upturn in the economy and a clear improvement
in demand, these trends will continue to slow the rise in total
volume of office space let over the next few months.
Rent index for tertiary activities.
1
24
25. offices
A Cushman & Wakefield Research Publication
AVAILABLE and future SUPPLY
5 000 000
9,0 %
8,2
7,9
7,4
1 000 000
0
500 000
56%
56%
56%
56%
2003
2004
2003
Total stock
2003
2004
2004
Total stock
After the modest amount of office space completed in Îlede-France in 2012 (570,000 sq. m.), developments completed
in 2013 totaled 750,000 sq. m., an annual increase of 32%.
Concentrated at 40% in three western sectors (La Défense,
the southwestern suburbs, and the Boucle de Seine), this
construction volume is still far from the record set in 2009
(1.3 million sq. m.). Nearly 60% of the total volume is for
development projects partially or fully pre-let (e.g., Cityzen
in Bois-Colombes, Solstys in the 8th district), or turnkey
schemes for large occupiers (first phase of new SFR
headquarters in Saint-Denis, new Carrefour headquarters in
Massy).
This change nonetheless confirms the increasing construction
activity in the Paris region. There were 2.03 million sq. m.
under construction at December 31, 2013, compared with
1.5 million sq. m. a year earlier. Part of the new volume is
attributable to speculative schemes, although there were also
a few turnkey projects (Ministry of Defense in Balard, Orange
éco-campus in Châtillon). Several significant projects are
under construction in Paris: 46,000 sq. m. developed by AXA,
near the Ministry of Defense; 38,000 sq. m. (Cardinal)
developed by SFL in the 2nd district; and 25,000 sq. m.
(Millénaire 4) launched by Icade in the Parc du Millénaire.
57%
25%
57%
25%
2005
54%
20%
54%
2006
20%
5.7
54%
25%
54%
54%
2007
6.6
56%
30%
56%
2008
30%
58%
58%
27%
25%
58%
27%
2009
27%
58%
2006
Total stock > 4,000 sq. m.
2007
2008
2009
New-redeveloped supply (all sizes)
57%
57%
24%
57%
25%
2010
24%
2011
25%
25%
20%
2005
2006
2007
2008
2009
Surfaces >4000 m²
Stock neuf/restructuré (toutes surfaces)
2005
7.1
58%
56%
30%
25%
58%
7,1
7.9
24%
3 869 380
3 869 380
3 869 380
5,7
8.0
7,9
3 720 902
3 720 902
3 720 902
3 290 764
3 290 764
3 290 764
54%
25%
0
Increase in construction
activity in the Paris region
57%
56%
56%
6,6
6,5
6.5
2 794 676
2 794 676
2 794 676
1 500 000
500 000
7.1
7.1
6.7
3 133 113
3 133 113
3 133 113
2 000 000
1 000 000
3 413 681
3 413 681
3 413 681
2 500 000
1 500 000
3 383 320
3 383 320
3 383 320
3 000 000
2 000 000
6,7
3 117 655
3 117 655
3 117 655
3 500 000
2 500 000
5,7
7,1
7,1
8,0
4 066 053
4 066 053
4 066 053
6,5
4 500 000
3 500 000
4 000 000
3 000 000
6,6
4 103 109
4 103 109
4 103 109
7,1
7,1
7,1
Trends in supply and vacancy rate in Île-de-France
6,7
5 000 000
4 000 000
7,4
7.4
57%
57%
23%
57%
23%
2012
23%
8,0 %
4 367 965
4 367 965
4 367 965
8,0
4 500 000
8,2
8.2
57%
9,0 %
7,0 %
8,0 %
6,0 %
7,0 %
5,0 %
6,0 %
4,0 %
5,0 %
3,0 %
57%
25%
57%
4,0 %
2,0 %
3,0 %
1,0 %
25%
2013
25%
2,0 %
0,0 %
1,0 %
0,0 %
2010
2011
2012
2013
Taux de vacance à moins de 6 mois
2010
2011
2012
2013
Vacancy rate within 6 months (%)
Available supply within six months continued to rise in 2013. With a total of
4,367,965 sq. m. at the end of the fourth quarter (+13% year on year and +17%
over two years) and a vacancy rate of 8.2%, available supply within six months
has reached an all-time high. This general trend, however, masks significant
differences among geographic sectors. Available supply rose moderately in Paris
(+9% in the first nine months of 2013), where the small number of new
developments compensated partially for the release of secondhand stock.
However, some tertiary sectors in the inner suburbs have experienced
substantial growth year on year. This was especially the case in La Défense,
where the vacancy rate (14.1%) reached an all-time high and available supply
represented four times the amount of take-up (annual average since 2009). Such
are the combined effects of releases, the slowdown of lettings processes, and
the completion of large new/redeveloped property complexes on overall
available supply in Île-de-France.
Secondhand available space rose 12% in 2013.The continued release of obsolete
assets widened the gap between them and assets that meet the latest standards
for energy efficiency, flexibility, and workplace comfort. The weak economy and
new releases will bring even more secondhand inventory onto the market in the
months ahead. Consequently, the declining quality of stock will raise questions
about the future of obsolete properties, namely the change in use of office
buildings.This was the case in Paris, where 393,000 sq. m. were transformed into
residential properties during the period 2001−20122.
While high-quality stock is still in relatively short supply, new and redeveloped
assets have increased year on year. Such assets account for 25% of total available
supply within six months, compared with 23% a year earlier. Large buildings
completed in 2013 are still not fully let, especially in western Île-de-France
(Eqho in La Défense, In & Out in Boulogne-Billancourt, etc.), while new, large,
speculative schemes are due to be completed in the first half of 2014 (Majunga
in La Défense, Défense Autrement in La Garenne-Colombes, Fairway in
Montrouge).
2
APUR, Transformation of Paris Offices into Residences (Transformations de bureaux en logements à Paris), July 2013.
25
26. January 2014
A Cushman & Wakefield Research Publication
Future supply to 2016
2 500 000
2 000 000
2 088 350
1 500 000
1 000 000
1 352 319
591 969
500 000
470 197
291 294
0
2014
2015
2016
Volume of secure future supply > 10,000 sq. m.
Volume of likely future supply > 10,000 sq. m.
Average take-up >5,000 sq. m. over the past 5 years
Average take-up >10,000 sq. m. over the past 5 years
The total volume of definite future supply of space over
10,000 sq. m. in 2014 (1,352,319 sq. m.) largely outweighs the
average take-up figure of office space over 5,000 sq. m.
(865,438 sq. m.) of the past five years. This imbalance is made up of
supply which was unabsorbed in 2013 (unabsorbed supply is
deferred to 2014), new releases, and occasional launches of
speculative schemes.A clear-cut recovery in demand seems unlikely
in the short term. Competition among tertiary sectors to attract
occupiers is therefore expected to grow more heated, despite
significant differences in volume and quality of stock in each
geographic area.
may be restored, after State-owned assets have been put on the
market (10 boulevard de Grenelle) and 46,000 sq. m. launched by
AXA at the Balard site. The ZAC Rive Gauche has also been a
victim of its own success. With new supply on hold until the
completion of the first projects in the Austerlitz-Tolbiac and
Masséna-Bruneseau sectors, the more residential neighborhoods
of Paris Centre Est and Paris Rive Gauche (e.g., Pushed Slab in the
13th, Parisquare in the 11th, and the Garance in the 20th) could enjoy
greater absorption of large properties.
Future supply for inner Paris remains relatively limited. Most new
projects will not be completed before 2016−2017 (Samaritaine
and Poste du Louvre in the CBD, expansion of major development
zones such as ZAC Clichy-Batignolles and ZAC Rive Gauche),
although Parisian occupiers will have access to high-quality property
solutions by the end of 2015. There will be more redeveloped
supply in the eastern part of the CBD (26 Drouot, Cardinal) than
in the highly valued Etoile district (1 Euler, 3−5 Friedland), where
some companies may attempt to renegotiate their leases in order
to lower short-term property costs. In addition to several
refurbished and secondhand buildings (Paris Bourse), this new
inflow may be to the advantage of cost-conscious occupiers less
dependent on a prestigious address. The conditions are slightly
different in the Left Bank, where immediate alternatives have been
virtually nonexistent since the absorption of several prestigious
projects in the 7th district (103 Grenelle, 23−25 rue de l’Université,
Laennec) and the gradual letting of refurbished buildings in the 15th
(Tour Cristal). In 2015, a more balanced offering in the 15th district
The WBD and La Défense account for 36% of total future supply
greater than 10,000 sq. m. outside Paris proper through 2015. This
figure reflects ongoing releases and the importance of projects
under development. The inflow of high-quality supply to Neuillysur-Seine could fulfill the needs of occupiers facing a scarcity of
supply in the western part of the CBD. Usually undersupplied, this
market offers, in addition to smaller refurbished properties
(164 Perretti), three projects larger than 10,000 sq. m. One of them,
Alegria, is ideally located near avenue Charles de Gaulle. LevalloisPerret also offers redeveloped (So Ouest Plaza) and refurbished
(Libertis, Espace Seine, Carré Champerret) large spaces that could
compete with those of Boulogne-Billancourt. Because of
opportunities created by large, recently redeveloped corporate
headquarters (In & Out) and by the just-completed first projects of
the second phase of Trapèze (Kinetik, the remaining space in
Ardeko), Boulogne could continue to drive activity in the
southwestern suburbs in 2014, after numerous large transactions
in 2013.
26
Primopera – Paris 9th
27. offices
A Cushman & Wakefield Research Publication
The largest spaces of the WBD will also have to compete with new,
redeveloped, and renovated office towers of La Défense. La Défense
offers occupiers a wide range of solutions. A few new buildings
(Carpe Diem, D2, Majunga), the remaining recently redeveloped
office towers (First), and several very high-quality secondhand
buildings (Cœur Défense, W) all meet the needs of companies
seeking prestigious headquarters that are conveniently located,
energy efficient, and comfortable. For occupiers in the sector or in
less established tertiary sectors nearby, there are several refurbished
or secondhand assets that could provide them the opportunity to
modernize their offices at a reasonable cost.
For refurbished and secondhand buildings at La Défense, the
adjustment of rental values and the larger incentives granted will be
even more decisive than some of the new supply in nearby sectors
with easy access to public transport. The WBD (Nework in
Nanterre) and the south of the Boucle de Seine (La GarenneColombes, Colombes) both provide viable alternatives. Enhanced by
the extension of the T2 tramway line, the south of the Boucle de
Seine in particular could benefit from the completion of new quality
projects (West Plaza). Other emerging districts of the inner suburbs
could outperform. Certain municipalities of the southern Hauts-deSeine département have a good image, significant new, inexpensive
supply, and easy access thanks to the extension of the Métro line 4
and tramway line 6. The markets in Montrouge (Fairway), Châtillon
(Area Prima), and Malakoff (White) are emerging as potential costefficient options for occupiers of more established tertiary sectors
nearby with little supply, such as Paris’s southern districts and the
neighboring town of Issy-les-Moulineaux.
The north of the Boucle de Seine should remain a naturally costefficient sector for occupiers aiming to lower their costs significantly
while having access to a Métro line.The area’s most attractive offers,
such as Pointe Métro 2 in Gennevilliers, are enhanced by the scarcity
of high-quality supply in Saint-Denis. After two years of steady
rental activity, the supply of new large properties in Saint-Denis has
dried up drastically. By the end of 2015, the town will have only two
buildings of more than 10,000 sq. m. and nothing larger than
20,000 sq. m. In the longer term, land opportunities in Saint-Denis
should provide development of large high-quality properties that
match the needs of occupiers. Until then, the scarcity of the SaintDenis market will play to the advantage of other towns in the
northern suburbs, such as Pantin (Pantin Elis) and Saint-Ouen
(Eurosquare 2). As for the eastern suburbs, they are one of the
emerging districts with the least supply in Île-de-France. New and
redeveloped stock larger than 10,000 sq. m. to be available by the
end of 2015 can be counted on the fingers of one hand. After
Orange’s letting of Eastview in Bagnolet in 2013 and pending the
launch of Altaïs Evolution in Montreuil, this sector will offer only one
building of more than 20,000 sq. m. on the future property market
(Tour 9 in Montreuil).
West Plaza – Colombes (92)
OUTLOOK
Economic recovery in France will no doubt be too sluggish to
stimulate consumption of office space in 2014. With companies
continuing to renegotiate their leases instead of relocating, the
volume of take-up should remain under the ten-year average.
Consequently the Île-de-France market will have significant
quantities of available space, leading to increased competition
among tertiary sectors to attract occupiers.Yet the influx of supply
could also serve as a catalyst for a more general recovery aided by
the easing of leasing conditions on the outskirts and by the launch
of redevelopment projects for large, well-located properties in
Paris. Reflecting a healthier balance between available supply and
occupiers’ search criteria, this change will strengthen the appeal of
office supply offering energy efficiency and services at a reasonable
price that matches corporate cost-cutting targets. High-quality
refurbished and secondhand supply with excellent links to public
transport could also stand out. Such stock fulfills the needs of
occupiers seeking a substantial reduction in rent or aiming to
relocate in a more established tertiary sector at the lowest possible
cost.
27
28. January 2014
A Cushman & Wakefield Research Publication
key lease transactions in 2013
submarket
BUILDING / LOCATION
TENANT
AREA (SQ. M.)
WBD
Arena 92 / Nanterre (92)
Conseil Général des Hauts-de-Seine
31,000
WBD
So Ouest / Levallois-Perret (92)
SAP
27,900
WBD
Nuovo / Clichy (92)
L’Oréal
25,000
Eastern suburbs
Eastview / Bagnolet (93)
Orange
24,700
LA DéFENSE
Tour Blanche / Courbevoie (92)
ERDF
21,480
NORthern suburbs
Le Monet / Saint-Denis (93)
SNCF
20,000
WBD
2-8 rue Ancelle / Neuilly-sur-Seine (92)
CMS Bureau Francis Lefebvre
16,500
BOUCLE DE SEINE
Newside / La Garenne-Colombes (92)
Technip
16,000
PARIS CENTRE EST
Visalto / Paris (75019)
Rectorat de Paris
15,200
SOUTHWESTERN SUBURBS
Bords de Seine 2 / Issy-les-Moulineaux (92)
La Banque Postale
14,100
LA DéFENSE
Tour Prisma / Courbevoie (92)
Fidal
13,600
SOUTHWESTERN SUBURBS
Noda / Issy-les-Moulineaux (92)
Coca-Cola
13,400
PARIS CBD
6-8 Haussmann / Paris (75009)
Banque Publique d’Investissement
10,500
SOUTHWESTERN SUBURBS
You / Boulogne-Billancourt (92)
Boursorama
8,800
Southern suburbs
Aristide / Bagneux (92)
Air Liquide
7,100
NORthern suburbs
Eurosquare 1 / Saint-Ouen (93)
SCA Hygiene Products
6,600
NORthern suburbs
Le Mermoz / Le Bourget (93)
DHL
6,400
PARIS RIVE GAUCHE
Tour Cristal / Paris (75015)
Altedia
5,900
PARIS RIVE GAUCHE
Spark / Paris (75013)
Aldebaran Robotics
4,800
Île-de-france office-market indicators
SUBMARKET
TAKE-UP (SQ. M.)
2012
2013
2012
2013
2012
2013
PARIS CBD
424,836
404,813
823
753
7.3
7.9
PRIME RENT (€ / SQ. M. / YEAR)
VACANCY RATE (%)
PARIS CENTRE EST
99,167
107,321
417
429
4.3
5.3
PARIS RIVE GAUCHE
163,183
97,427
679
680
5.0
5.3
LA DÉFENSE
158,804
96,509
514
498
7.9
14.1
WBD
289,044
265,934
417
488
12.6
13.4
BOUCLE DE SEINE
56,320
58,929
277
292
14.4
17.1
SOUTHWESTERN SUBURBS
138,800
170,566
464
463
10.1
10.3
Eastern suburbs
53,712
46,956
294
257
8.1
7.4
NORthern suburbs
231,586
119,297
315
310
7.9
7.3
Southern suburbs
145,159
131,310
357
310
7.9
9.4
OTHER SUBMARKETS
337,740
244,040
244
248
5.6
6.0
TOTAL ÎLE-DE-FRANCE
2,098,351
1,743,102
838
753
7.4
8.2
28
29. Les marchés
immobilierS
français
études & Recherche Cushman & Wakefield
PERSPECTIVES
Après l’embellie passagère de 2011, l’année 2012 a marqué une contraction du marché des bureaux d’Ile-de-France, illustrée par la remontée
sensible de l’offre disponible et le fléchissement de la demande des utilisateurs. Si l’envolée du taux de chômage est généralement moins
marquée en région parisienne qu’au niveau national, les perspectives économiques ne permettent pas d’espérer une franche reprise de la
consommation de surfaces de bureaux dans les prochains mois. Elles augurent au contraire d’un plus grand attentisme des utilisateurs, qui
pèsera sur l’évolution de la demande placée. Contraintes de poursuivre la réduction de leurs coûts immobiliers, les grandes entreprises
continueront toutefois d’absorber les bureaux neufs ou de seconde-main de qualité d’Ile-de-France, au profit des marchés les plus établis qui
offrent encore quelques rares opportunités d’implantation ou des marchés tertiaires disposant de bureaux neufs bien reliés aux transports.
29
31. 03
FRENCH LOGISTICSWAREHOUSES MARKET
45%
35%
31%
20%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
France
Paris region
2,170,000
39%
1,800,000
25%
2,400,000
27%
1,760,000
45%
1,600,000
2,600,000
34%
2,200,000
30%
2,000,000
25%
1,500,000
2,600,000
Take-up in France (sq. m.)
1,000,000
”
The French logistics-warehouses market recovered in 2013. Total take-up
increased by 21% year on year, to 2.17 million sq. m., a performance that should
nonetheless be put in perspective.Volumes were inflated by large turnkey projects
of in-house logisticians in the retail-distribution sector, and the total number of
transactions has been in decline since 2011. As in 2012, take-up in Île-de-France,
France’s leading logistics center, was well below the average of the past ten years.
This slowdown reflects the challenges faced by a rental market destabilized by
economic uncertainties and high taxes, pressures that dampen occupier demand
and slow the development of new projects.
32. January 2014
A Cushman & Wakefield Research Publication
ECONOMIC TRENDS
Economic performance indicators of developed countries have improved
since the end of 2012, confirming faster GDP growth in Japan, an improved
job market in the United States, and recovery in Europe that is slow but
steady. Nevertheless risk has not been eliminated, as witnessed by the
magnitude of public debt and the weakness of the banking systems.
Business activity in emerging economies has slowed sharply, forcing
numerous forecasters to trim their global growth estimates. World trade
growth is expected to rise 4.5% in 2014, a lower rate than that forecast a
few months ago (though better than 2013’s 2.5% growth) and still under
the average of the past 20 years (5.4%).
Exports and manufacturing output rebounded in 2013, reviving French
business activity that was also helped by the upturn in other parts of
Europe. Household consumption was aided by the generous socialsecurity safety net, a very low inflation rate, and a more moderate rise in
taxes. However, not all clouds have been dispersed from the French
economic horizon.The business climate remains much less favorable than
its long-term average, and unemployment rates and corporate bankruptcies
are at all-time highs. Penalized since the beginning of the crisis by weak
volume and lower prices on service contracts, the transport sector will
continue to suffer in a very unstable environment.
OCCUPIER DEMAND
Take-up According to Occupiers’ Motivations and
Characteristics
At 2.17 million sq. m.1, total take-up in 2013 in France rose sharply
(21% year on year), a slight improvement over the ten-year average
(1.946 million sq. m.). Higher take-up was nonetheless accompanied by a
significant decline in the total number of transactions. Many occupiers
preferred lease renegotiation to relocation. The high proportion of very
large transactions (13 larger than 40,000 sq. m. comprising 30% of total
take-up) also attests that consolidation remains a priority. An increasing
number of logistics providers and in-house logisticians are reducing their
total sites and opting for larger platforms (e.g., Castorama in SaintMartin-de-Crau, Intermarché in Villeneuve-lès-Béziers). When located
near major highways, port facilities, and large consumption markets, such
platforms allow occupiers to optimize their transport costs by limiting
unladen journeys and by increasing the flow of goods.
Occupiers’ desire for modern buildings is also attributable to their need
to adapt to changes in regulatory requirements governing product safety
and traceability, to requirements concerning delivery quality and time,
and to their search for greater productivity. Several quality products on
the market were let in 2013, increasing the share of new or recent assets
in total take-up: rare assets recently placed on the market as speculative
developments, buildings modernized to meet new standards, and class-A
platforms vacated by tenants. But it was demand that drove the large
turnkey projects that satisfy the increasingly sophisticated needs of
Transactions > 5 000 sq. m. including turnkey and owner-occupied premises but excluding lease renewals.
1
32
Logistics of large
distribution retailers
The significant share of take-up in 2013 (19%) accounted for
by large food retailers reaffirmed the broad scale of costcutting strategies implemented in recent years. Most realestate projects in France are designed to improve profitability,
in an environment of slower consumer spending and a price
war among retailers. Sales channels have also proliferated
with the rapid development of e-commerce and click-andcollect grocery pickup. These trends explain the growth of
increasingly sophisticated buildings equipped with an
abundance of information systems and automated features
(e.g., the new Scapalsace/Leclerc platform near Colmar and a
project under development for Système U in Fontenay-leComte, in the Vendée region).
Larger platforms are also in demand, because they can serve
various formats of shops or regroup fresh, dry, and frozen
products (e.g., Intermarché’s new platforms).The most active
retailer in the French logistics-warehouses market is
Intermarché which since 2010 has completed 10 transactions
of more than 10,000 sq. m. throughout France.
33. Logistics
warehouses
A Cushman & Wakefield Research Publication
logistics work, as well as the acceleration of in-house logisticians’
business strategies for reorganizing their supply chains. As in 2012,
in-house logisticians in the retail-distribution sector were the
major drivers in the French market and accounted for 52% of total
take-up volume in 2013. Supermarket groups were especially active
(see page 32). Other categories of retailers also launched major
development projects, in an effort to adapt to the proliferation of
sales channels and number of outlets (e.g., GIFI, with 73,000 sq. m.
in Sin-le-Noble, near Douai).
Logistics providers have lost market share and now account for no
more than 30% of total take-up, compared with 34% in 2012 and
nearly 50% in 2011. Although their share of take-up was
automatically reduced by a few very large transactions completed
by in-house logisticians, logistics providers have suffered mainly
from the economic crisis and consequent downturn in volume of
merchandise. The precariousness of their service contracts was
reflected in the limited number of transactions and the increasingly
frequent use of short-term leases intended to lower the risk of
letting buildings that logistics providers may not be able to occupy
in the long term.Although major transactions for logistics providers
were relatively few, several of them reaffirmed that certain niche
markets remain robust (e.g., cold chain and pharmaceutical
logistics).The growth of online sales boosted e-commerce logistics,
as seen in transactions carried out by some of the sector’s major
players: Coliposte in Pantin, Orium in Hénin-Beaumont, Alpha
Direct Services in Moissy-Cramayel, and Kiala in Savigny-le-Temple.
Take-up According to Geographical Sector
The four principal markets along France’s north-south axis (Lille,
Paris, Lyon, and Marseille) accounted for only 58% in volume of
warehouse space let or sold to occupiers in 2013 in France,
compared with 73% the previous year. This decline conceals
significant differences between geographical sectors and concerns
mainly the two largest French markets. The Paris and Lyon markets
were penalized by a sharp decline in the number of large transactions
and by a fall in demand from logistics providers. High taxes and a
growing shortage of land further exacerbated the context.
In 2013 in the Paris region, 440,000 sq. m. were let or sold to
occupiers, a decline of 21% year on year and of 33% compared with
the annual average take-up over the past ten years. Contrary to
many major trends in France, large turnkey projects were relatively
rare. Certain pending development projects will inflate take-up
volume in 2014 (Toys’R’Us with 51,000 sq. m. in Saint-FargeauPonthierry). These recently or soon-to-be launched development
projects illustrate the gradual shift from in-house logisticians to
areas far from the conurbation’s center, mainly the Seine-et-Marne,
a département that accounted for 48% of take-up in Île-de-France in
2013. Yet although these projects contribute increasingly to total
volume, most transactions in 2013 involved existing supply. Several
leases and sales of secondhand properties reaffirmed the
attractiveness of well-located, less expensive buildings with
operating permits.
The Lyon market also lagged, with only 190,000 sq. m. let in 2013.
This annual decline of 51% is consistent with the significant decrease
in the total number of transactions and the small number of
transactions greater than 20,000 sq. m., compared with the interest
shown in 2012 for this category of surface area (Darty, Fiducial
Office Solutions, Conforama, etc.).This change is partly the result of
a market with less available space, whether for high-quality
properties or for land opportunities allowing long-term development
of large platforms. However, a few large-scale development projects
are under way in the Isère département, at the initiative of large inhouse logisticians in the retail-distribution sector. These projects
should provide momentum to the lettings market in 2014.
Key LEASE TRANSACTIONS IN 2013
Location
Tenant
Area (sq. m.)
ZI Bois de Leuze / Saint-Martin-de-Crau (13)
Castorama
113,000
Sin-le-Noble (59)
Gifi
73,000
Parc Prologis / Moissy-Cramayel (77)
Transalliance
65,000
Heudebouville / écoparc 2
Intermarché
58,000
ZI de Saint-Martin-sur-le-Pré / Récy (51)
Scapest (Leclerc)
44,000
Parc des Bréguières / Les Arcs-sur-Argens (83)
Carrefour
42,000
ZAC de la Houssoye / La Chapelle d’Armentières (59)
Lidl
42,000
ZI des Marches de Bretagne / Saint-Hilaire-de-Loulay (85)
Sonamia
36,000
PA du Pays de Meaux / Villenoy (77)
C&A
32,000
Parc Prologis / Moissy-Cramayel (77)
ADS (Rakuten group)
29,800
Parc Parcolog / Beaune (21)
Massa Pneus
26,500
Parc Parcolog / L’Isle d’Abeau (38)
Rhenus Logistics
21,800
33
34. January 2014
A Cushman & Wakefield Research Publication
RENTAL VALUES
250,000
440,000
560,000
2009
850,000
630,000
790,000
640,000
2008
450,000
690,000
700,000
1,000,000
Take-up in Île-de-France (sq. m.)
2003
2004
2005
2006
2007
2010
2011
2012
2013
The markets in Lille (take-up of 254,000 sq. m.) and Marseille (takeup of 350,000 sq. m.) were more lively in 2013 than in the previous
year. Although there were relatively few transactions, these two
markets benefited from the launch of very large projects that
confirmed the decisive role played by a handful of large retailers
(Gifi with 73,000 sq. m. in Sin-le-Noble and Lidl with 42,000 sq. m. in
La Chapelle d’Armentières, near Lille).The scale of certain platforms
emphasized the rapid growth of several regions, such as LauwinPlanque in the north, where the arrival of Log’Solutions follows the
installations of Big Ben Interactive, Amazon, and Gifi; and SaintMartin-de-Crau, near Marseille, where Castorama will have a
platform of 113,000 sq. m. Located at the transport crossroads
between Spain and Italy and just a few kilometers from the port of
Marseille, Saint-Martin-de-Crau has consolidated its position as a
major logistics center in southern France. In the middle to long
term the site will comprise more than 500,000 sq. m. of warehouses
operating on the basis of cost-cutting and expansion strategies of
large logistics providers and in-house logisticians (Castorama,
Maisons du Monde, Katoen Natie, etc.).
Totaling nearly 1 million sq. m., take-up outside the four principal
markets rose 33% year on year. These markets, generally more
attractive in terms of development cost and available land, benefited
from consolidation and expansion projects of in-house logisticians
aiming to reduce transport costs and to grow their business.
Although relatively quiet, logistics providers were active in certain
regions that are traditional thoroughfares, such as the Burgundy and
Centre regions. However, it was in western France that a few
markets stood out. Because of a wide variety of demand, the Pays de
la Loire region saw take-up of more than 100,000 sq. m. in 2013.
These excellent results were due to the development of numerous
turnkey projects of in-house logisticians (e.g., DSC in Derval,Toyota
in Carquefou) and logistics providers (e.g., Stef in Saint-Nazaire).
34
Rental values in 2013 were stable overall, with prime rent slightly
more than €50 / sq. m. / year in Île-de-France. However, the
overriding need of tenants to lower property costs continued to
dictate negotiation (or renegotiation) terms with landlords.Anxious
to limit the costs associated with vacancy rates and to keep their
assets occupied, landlords granted significant incentives, mainly as
rent-free periods of, on average, one to one-and-a-half months per
year of commitment for the highest quality assets. Such incentives
have increased the gap between headline and net-effective rents.
In an environment where a premium is accorded to assets that are
well adapted to occupiers’ cost-cutting and enhancement strategies,
and that meet the increasingly strict regulatory standards, rental
values remain extremely diverse. They can vary widely even within
the same market, depending on a building’s location and intrinsic
quality, and on the type of transaction (e.g., product available on the
open market, turnkey). The decline in quality of existing supply and
the shortage of land in several well-known areas also explain the
upward price pressure in certain micromarkets with little available
space.
Prime rents for logistics warehouses (€ / sq. m. / year)
AVAILABLE AND FUTURE SUPPLY
Trends in available supply
The rise in take-up was not mirrored by a fall in available space,
because lettings were mainly of turnkey and owner-occupier
projects, not of available supply. At a little more than 3 million sq. m.
throughout France, available supply rose by 5% year on year, mainly
because of additional vacations. Several occupiers have reduced the
number of their sites and turned instead to new or recent large
platforms. In addition, the trend for tenants to renegotiate their
leases rather than to relocate limits the absorption of available