Paris' La Défense business district has launched an advertising campaign to win over London-based banks and companies following the UK's exit from the European Union, delegates heard at PropertyEU's France Investment Briefing in Paris on Tuesday.
If there were any doubts about the determination of Paris to benefit from Brexit, the advertising campaign launched yesterday in the UK puts them to rest. 'Tired of the fog? Try the frogs!' is the tongue-in-cheek message that appears in British newspapers and on billboards, an open invitation to relocate to Paris extended to all London-based banks and companies worried about the UK's exit from the EU.
The invitation is more likely to be accepted now because things are finally looking up for France, experts agreed at the PropertyEU France Investment Briefing, which was held on Tuesday at the London offices of Gide Loyrette Nouel.
'The supertanker has finally turned,' said Larry Young, director of international investment at BNP Paribas Real Estate. 'The French market is recovering from the crisis. Coming out of the recession has been a slow process but we are now seeing positive signs, especially in the office sector.'
France has Europe's largest office market with 53 million m2 of stock but, as all roads lead to Paris, the improvement is particularly noticeable in the capital. Office space take-up in the Paris region has increased by 26% in the first half of 2016 compared to the same period last year, supported by job creation, and vacancy rates in all markets are significantly down. The lack of new quality stock is pushing rental growth.
Last year, despite challenging conditions and a weak economy, investments in commercial real estate in France were €31.9 bn, and in Paris they reached €23.1 bn, the highest-ever recorded volume. The forecast for France this year is €28 bn, but the lower figure is due to lack of willing sellers and shortage of stock rather than lack of interest. 'Foreign investors from the US, the Middle East, Europe and Asia are all competing with domestic investors for deals,' said Young. 'Demand is high and we expect to see more activity as the economy is growing again.'
In the first half of 2016 Paris has gained one place, overtaking Tokyo to rank at number 5 in the global investment volumes rankings and is second only to London in Europe.
The sense of momentum in the Paris office market is also due to a vibrant local economy, with many successful French start-ups that compete with foreign companies for space in the city centre. 'The Opéra area for example is very trendy at the moment, and in one building chosen by Facebook and others, rent is €800 per m2, which would have been unthinkable,' said Young. 'Publicis has chosen the Bastille area, which again would not have happened a few years ago, but the atmosphere has really changed for the better.'
Nowhere more so than in La Défense, which suffered during the crisis much more than the CBD but is now recovering and seeing the first signs of rental growth. In the first half of this year office investments in the area have increased by an astonishing 421% to €989 mln. It is not surprising, then, that the 'Tired of the fog? Try the frogs!' advertising campaign has been organised by Paris La Défense, which describes itself as 'one of the world's largest and liveliest business districts in the heart of Europe.'
