France's regional office market saw a relatively stable start to the first quarter of 2009, according to international property advisor Savills, with leasing activity down by 10% compared to 14% in Paris.
France's regional office market saw a relatively stable start to the first quarter of 2009, according to international property advisor Savills, with leasing activity down by 10% compared to 14% in Paris.
Prime yields have shifted up by 50 to 170 basis points and currently range from 6.75% in Lyon to 7.25% in Toulouse for the most secured office buildings.
The report on the French regional office markets found that due to the low concentration of headquarters in regional markets the impact of the economic crisis was more restrained in that sector then in other areas. Lydia Brissy of Savills European research says: 'The regional office market experienced a slowdown during the second part of 2008 but it was moderate compared with other markets. This may change in 2009 when small and medium-sized companies begin to feel the effect of the economic crisis and face financial difficulties and postpone hiring.'
Despite some focused demand, immediate supply is on the rise due to rationalisation and consolidation as well as the high level of completions. Furthermore, available stock is expected to increase during 2009 in most markets.
In terms of rental values, Marseille and Lille have seen upward growth. Letting deals negotiated at Les Docks in Marseille recorded at EUR 300/m2/year have caused average rental values to continue to rise. Prime rents in the area reached EUR 254/m2/year at the end of the first quarter of 2009. In Lille, prime rents reached EUR 200/m2/year during the first quarter of the year, pushed by transactions signed for prime properties.
