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Office Market Report Q2 2020

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Real estate lethargy !


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Sharp decline in the first half of the year


La Défense makes an exception with a mega-deal


Rents and vacancies up slightly



The paralysis caused by the economic shutdown may now be behind us, but activity is struggling to get underway and remains in a state of dormancy which varies in depth by sector. With little reassurance in terms of the social and economic consequences and forecasts as well as concerns regarding how long the coronavirus will be with us, business are taking a wait-and-see stance. Those that are taking action are increasingly seeking to reduce costs over the short term meaning that real estate plans involve renegotiating existing leases rather than moving office.

Given this climate, activity in the real estate office market has been lethargic with a -40% decrease in take-up over H1 2020; this leads us to believe that we will see one of the weakest performances on record in 2020.

Strong decreases were recorded across all space segments, only 12 transactions for spaces over 5,000 sq m were finalized over H1 2020, representing a -40% year-on-year reduction.

As at 30/06/2020, immediate supply stood at 2.9 million sq m; this is +3% higher than last quarter and +5% more than at the end of H1 2019. At 5.5%, the vacancy rate in the Greater Paris Region is slightly higher than both last quarter and last year. The Paris market remains under high pressure with a vacancy rate of 2.9%.

There may only be limited volumes of confirmed future supply on the Paris market (-9% quarter on quarter), but in the suburbs levels should be driven by a +14% increase in project completions this quarter, even though some that were initially scheduled for the end of 2020/early 2021 have been delayed by the lockdown.


Office Market Report Q2 2020

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