Prime Office and Commercial Real Estate: A Market Rebound in 2021 in Paris and Internationally?
While office leasing activity declined sharply due to the health crisis, investment in prime commercial real estate in Paris and major international cities remained strong throughout 2020.
Already weakened before the pandemic, retail real estate has been particularly affected since the first lockdown.
However, professionals anticipate a gradual rebound in the commercial real estate market during the second half of 2021, driven by new uses and more resilient assets.
Office Real Estate in Paris: A Mixed Decline
Is tertiary real estate the main victim of the Covid-19 crisis? Not necessarily, especially when it comes to prime office assets in Paris, according to Cushman & Wakefield.
While office take-up in Paris fell by 45%, reaching only 1.3 million sqm in 2020, investment volumes remained stable, totaling €3.4 billion.
This resilience is largely due to rising prices, with average values increasing from €16,000 to €18,000 per sqm within one year for prime office properties.
Strong Support from Domestic Investors
Domestic investors continue to play a key role, accounting for 69% of investment volumes in 2021.
Logistics hubs, data centers and office buildings located near Paris’ ring road — particularly those serving ICT, finance and administrative sectors — are among the most sought-after assets.
Real Estate: A Necessary Reinvention
According to the Paris Urban Planning Agency (Apur), 83,400 commercial units were recorded in 2020, including 61,500 retail stores, cafés, restaurants and services.
Vacancy rates rose from 9.3% to 10.5%, creating new opportunities for investors.
Vaneau Bureaux & Commerces, a specialist in high-end commercial real estate in Paris, supports private and institutional clients in acquiring offices, retail units and commercial premises. Entry-level opportunities remain available, with some assets offered at competitive prices.
2021: Cautious Optimism for the Tertiary Market
Commercial real estate remains a strategic investment class, provided assets adapt to new standards such as building monitoring, data-driven usage analysis and flexible office spaces.
According to experts, a rebound in prime tertiary real estate in Paris and internationally could occur from the second half of 2021, subject to improved sanitary conditions.