The office market in the French city of Lyon is set to remain the focus of investor interest, according to a new research report by international property services firm Savills. The investment market in Lyon, located in central-east France, is remarkably dynamic despite the difficult economic climate, Savills said.
The office market in the French city of Lyon is set to remain the focus of investor interest, according to a new research report by international property services firm Savills. The investment market in Lyon, located in central-east France, is remarkably dynamic despite the difficult economic climate, Savills said.
About EUR 330mln of deals were recorded in the first quarter of 2008, compared with EUR 1.1bn for the whole of 2007. Over 60% of this volume involved forward fund opportunities. Yields have risen in line with the national picture, at between 50 and 100 basis points, and Savills expects this trend to continue due to an encouraging level of business activity in the region driving up rental levels.
In the leasing markets, the improved quality of service sector office stock and development of infrastructure have had an impact on rental levels, which increased by up to 24% in some of the most sought-after districts. In the Part-Dieu, Confluence or the International City districts, new buildings benefiting from good services can be worth as much as EUR 260 per m2 per annum.
Office take-up in the first quarter reached 41,500 m2, with prelets accounting for a third of this volume. Lydia Brissy, associate director of research at Savills, said: 'After exceptional performances achieved in terms of take-up, volume of investment and rent levels, and in spite of a rather gloomy economic outlook, forecasts of business activity in the Rhone Alps region remain encouraging.' At 286,000 m2, Lyon's letting volume was the second largest in France last year, Savills pointed out.
