Paris take-up expected to drop 20% this year - JLL

Take-up in the greater Paris area is expected to drop 20% in 2009 compared to last year, from 2.35 million m² in 2008 to approximately 1.8 million m² in 2009, Benoit du Passage, managing director of Jones Lang LaSalle France, said during the JLL Occupational Markets Briefing in Cannes on Wednesday.

'However, we expect the number of deals over 5,000 m² to be similar to 2008,' Du Passage said. He added that there is a preference amongst occupiers at the moment for new developments outside the centre of Paris which are easily accessible. 'Typically, occupiers are focusing on high environmental standards which are provided by new schemes and expect to pay rents below EUR 350 m² pa', he said.

Occupiers are being driven by cost reduction and rationalisation of their businesses and these issues are expected to move even further up the corporate agenda this year and in 2010, Du Passage said.

He noted that some sector changes will emerge in 2009, including government sales of some assets in Paris. The French government, for example, has plans to reduce its real estate operating costs by moving out of central Paris. Financial companies will continue to look for cost reductions and ways to rationalise their businesses, while banks will relocate from the traditional business district to less expensive areas. Du Passage: 'We believe caution and hesitation in the legal sector in the medium term will lead to job losses and company restructuring.'