2012-12-31-莱坊-Paris_Office_Market_Digest_Paris_CBD_Q3_2013_8页_4mb

Paris CBD Market Analysis - 3rd Quarter 2013

The leasing market in the Paris Central Business District (CBD) during Q3 2013 showed resilience in activities, largely due to its focus on the Public & Medical Service (PMS) segment, which outperformed broader market trends.

Key indicators:

• Take-up: Approximately 224,000 square meters leased, a slight decrease (-2%) compared to the previous quarter, but still outperformed the regional average decline of -29%. Compared to Q3 2012, the CBD's share in regional activity rose from 12.4% to 17.5%.
• Supply: The stock reported was 3,290,000 sq m, a -2.9% compared previous quarter; CBD vacancy rate was 4.9% (-0.2% from Q2 2013), still very low compared to 7.1% in the region.
• Rent: Average rent (-6.8%), prime rent (-8.5%) decreased compared to Q2 2013. The scarcity of quality space and pent-up demand from companies delayed some decisions and limited take-up despite strong fundamentals.

Other relevant trends observed:

• Growing undersupply in the CBD (-14% above league table vacancy) contrasts with the regional vacancy rate (7.1%).
• The share of Grade A space in CBD is notably lower (at 14%) compared to the region (22%).
• Several large transactions (>5,000 sq m) highlighted strong demand from prestigious tenants, but also pointed to a scarcity of quality space and lower valuations for second-hand areas.
• Despite underperformance in pre-letting (only 22.6% of Grade A space was pre-let or newly built), the potential exists for market to reverse if large landings occur.

In summary, the Paris CBD market faced contradictory dynamics: huge under-supply and low vacancy rates masked pockets of quality space shortage, while transactions were mixed, supported by strong PMS segment and selective large deals.