Sales and rentals of small size offices (those which are less than 1,000 square meters) have jumped 22% year on year in Paris.
The market for offices in Paris Region (sales and rentals mixed) saw its revenue in the second quarter to decline by 24% year on year.
On the whole semester it amounts to 915,200 square meters, down 22% compared to the first half of 2014. Although stronger than expected, the decline was expected for several reasons: the strong economic slowdown in the summer of 2014, the settlement of claims in medium and large surfaces and the lower volume of leases maturing in 2015.
However several major projects should materialize in the coming months and allow a catch volumes in the second half of the year, leaving us to reasonably believe that the 2 million square meters placed in 2015 remains attainable.
An increase of 10% for small size offices
Though the office segment of small areas (less than 1000 square meters) did better than last year (+ 10%), supported by an extremely dynamic market in Paris (+ 22%, record high).
While the segment of medium size offices (between 1000 and 5000 square meters” was down (-9% yoy).
The vacancy rate of the Paris office for its part reached 7.6% on 1 July, as last year. For the second quarter, the total amount of investments in commercial real estate in Ile-de-France were down 68% year on year, to 1.8 billion euros. Over the first half it was 5.4 billion euros, down 38% compared to the same period in 2014.
A rapid improvement should quickly take shape. Several structural indicators of the rental market and investment allow to be confident for the coming months. The prominent place occupied by Paris in the European and international real estate market, stable rents and vacancy rates is prone for self-regulation of supply. On the investment market, the second half of 2015 promises high potential. The indicators on the level of closing of outstanding transactions will be encouraging during the next six months.