“Increasing interest rates put all transactions in the freezer”
When will the weather be good in office real estate? Like climate change, the business environment is being disrupted. Despite the war in Ukraine and the energy crisis, after three cloudless quarters, the last four months of 2022 were marked by all kinds of deterioration and turmoil. Due to continued demand, however, marketers are hoping for better days ahead. After a 2021 marked by user uncertainties between Covid and remote working, things started well last year. Markets are driven by the allure of Paris and the inner suburbs of the Ile-de-France region.
“Every day, big companies announce that they are coming to the capital to set up. Last week, Arcelor Mittal announced it was leaving Saint-Denis for the 9th region. Vincent Bollaert, president of Knight Frank France, announces the statement Gallery of one “office resistance”, At a press conference held on January 17.
“Paris represented 50% of the purchase and La Défense market performed very well” Supporting Barbara Koreniouguine, French President requested by Cushman & Wakefield Gallery.
“Endogenous” or “frontier” market
The latter asked his teams to define the nature of major operations. For surfaces less than 5,000 square meters, the capital remains the same “endogenous market”, that is, tenants stay in Paris, which is synonymous with amenities (food shops, restaurants, etc.), talent retention, and busy city traffic. For those over 5000 m², if 60% of transactions remain “endogenous”, 27% were produced in the market “adjacent”. For example, companies leave La Défense for Courbevoie or Neuilly-sur-Seine.
2022 was also synonymous with the entry into force of the third decree. This regulation requires owners, occupiers or tenants of surfaces over 1000 square meters to reduce their energy consumption compared to 2010 by: – 40% in 2030, – 50% in 2040 and – 60% in 2050, carbon over the horizon neutrality should be achieved. “Climate risk is a powerful driver of changing search criteria,” Cushman & Wakefield’s French President Barbara Koreniouguine is convinced.
Investment “pouring” in the 4th quarter of 2022
All is going well until Q4 2022 when access to funding cools down. Autumn passes earlier than expected in winter, resulting in a “fall” investments.
“Rising interest rates put all operations on hold,” Vincent Bollaert, President of Knight Frank France, notes.
“Q4 2021 was too soft, too low at -51% YoY. Investors don’t like uncertainty,” Cushman & Wakefield’s Barbara Koreniouguine deciphers.
The latter even predicts that between inflation and higher wage demands, renters will start talking about it. “voltage rating” describing their charges.
Marketers are ‘reasonably confident’ for 2023
The return of the sun after the storm? For 2023, the leader says to himself “reasonably confident”. Despite the economic and geopolitical context, demand remains resilient “unstable”. “70% of leases will expire” he says. In other words, next year will be synonymous with action. An increase in interest rates, “freezing all operations” According to Vincent Bollaert, it should also facilitate communication between buyers and sellers so that they do not have to write down negotiations.
“We are witnessing an inevitable convergence between stakeholders around a value adjustment and restoring fluidity through the integration of macroeconomic constraints,” Knight Frank president adds.
“After a decade of low rates, the high cost of money means we will be looking for the right match between buyers and sellers and the right price in the first quarter.” Barbara Koreniouguine confirms.
Mid-2023 will undoubtedly be synonymous with the end of construction sites in Paris. The city wants all work to be completed by the 2024 Olympic and Paralympic Games…
Trade increased retail park and returning tourists
In the middle of the shopping center and business and leisure area retail park They did well in 2022. Between the events they organize and their cultural offerings, their costs are lower than traditional supermarkets, explains Barbara Koreniouguine of Cushman & Wakefield. “These new formats have demonstrated the true resilience of the trade” Vincent Bollaert of Knight Frank nods.
In general, the return of tourists has created conditions for the revival of the sector. “Ahead of JOP 2024, all brands are looking for permanent premises or ephemeral stores”, Barbara Koreniouguine says. Especially for publication Worldwide leading Developed by Cushman & Wakefield, Five of the world’s ten most commercial highways are located in the capital…
