The momentum continues. After a very good start in the 1st quarter of 2022, the office market in the six main regional cities* represents a total volume of 607,200 m² ranked 1.eh half of this year, an increase of 29% compared to a year in the same period. However, this volume is eight points lower than the historical peak in 2019.
“This result is explained in particular by the return of large surfaces (> 5,000 m²), an increase of 63% over a year, analyzes Jean-Laurent de La Prade, Deputy Managing Director of BNP Paribas Real Estate Transaction, in charge of the regional division. The other surface niches (1,000-5,000 m² and 0-1,000 m²) have also increased by 15 and 21% respectively. »
In terms of volumes placed, the six main markets are all up. Lille is doing well and remains at the top of the regional ranking with 169,000 m² marketed (+47%). Lyon is in second place with 147,000 m² (+12%), followed by Aix-Marseille (86,000 m², i.e. +6%), Nantes (73,000 m², i.e. +8%), while Bordeaux and Toulouse share the 5th.e position with 66,000 m², an increase in take-up volume of 56% and 82% respectively.
“The market was mainly driven by the public and para-public sector, as well as the strong comeback of coworking,” says Jean-Laurent de La Prade. The lease of 38,470 m² in Lille by Cité administrative, the lease of 14,300 m² by Exotec and the Malakoff Humanis group of 9,000 m² are the most important transactions for the northern metropolis this semester. In Lyon, the tax department and INSEE leased 20,000 m², WHO-Métropole Lyon signed a lease for 11,000 m² and Agicap leased 5,300 m². In Marseille, the Bouches-du-Rhône department leased 8,500 m². GRDF has rented 6,800 m² in Nantes. On the coworking side, Flex-o and Newton Offices continue their development by renting 3,900 m² in Bordeaux and 4,300 m² in Toulouse respectively.
Although we expected an explosion in supply in 2020, it is finally continuing to decline. The supply in one year shows a significant decrease of 12% compared to the same period in 2021 and now represents 1,550,000 m². This decrease primarily concerns new supply (-20%, i.e. 511,000 m²) and to a lesser extent used supply (-7%, i.e. 1,038,000 m²), which represents 67% of the regional market. “The new and future offer is largely consumed by large accounts that have chosen new buildings, the brand that offers the best services to attract and retain talent,” comments Jean-Laurent de La Prade.
An increase in rental values
With a decrease in available supply, unemployment rates contract. They are less than 6% in each of the six regional cities. This observation helps to create tensions on rental values, which rise as a result. “Top” rents are also on the rise, except in Lyon. Their value varies between €260 excl. VAT/HC/m²/year in Lille and €360 excl. VAT/HC/m²/year in Bordeaux.
“We are very hopeful for the second half of the year, as the demand expressed with our team has increased significantly by 19% compared to H1 2021 with 760,000 m² registered. Regarding our landing prospects, we could do better than 2019 and exceed 1.3 million m²- the brand”, predicts Jean-Laurent de La Prade.
Investments in the region are increasing
During the first six months of 2022, the national investment market grew by 29% compared to 1.eh half of 2021. It thus reached a volume of 12.5 billion euros for all asset classes combined, including 4.9 billion euros in the regions. As for offices, almost 1.35 billion euros were invested in the regions of the 6.2 billion. EUR that was committed in France.
Lille, Toulouse, Montpellier and Strasbourg performed better compared to 2021. The cities of Lyon and Marseille exceeded €200 million invested this semester, thanks in particular to two transactions over €100 million. That, in Lyon, with Principal Global Investors and Atream, which acquired the 30,000 m² Urban Garden campus in Gerland from HIG Europe Realty Partners, as well as that, in Marseille, with Perial AM as part of the purchase of the La Marseillaise tower for an amount of over 200 million EUR.
An extremely reassuring sign is that the weight of off-plans remains at 30% of the invested volumes, although the share of empty off-plans has decreased slightly.
Rates of return prime remain largely stable in regional markets. Rate cuts are observed in particular in Lille (by 15 bps to position itself at 4.00%) and in Bordeaux, where the rate fell from 3.90% at the end of 2021 to 3.70% on 1.eh semester 2022.
“The increase in financing costs and OAT will certainly have an impact on property prices on the annual result. However, we are convinced of the investors’ interest in positioning themselves in the office market in the regions, given the strong dynamics of the rental market and the planned increase in value due to the scarcity of supply. new on the way,” concludes Jean-Laurent de La Prade.
* Lyon, Aix-Marseille, Nantes, Toulouse, Bordeaux, Lille