Amid the shifts in Europe's office market dynamics, it is essential to recognize that there remains significant value in select secondary office locations. Hear from Roméo Yombo-Nguitongo and Thierry Cherel, Real Estate research specialists and Thibaut Cuilliere, Head of Real Asset and Sector research.
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The widespread adoption of remote work following the COVID-19 pandemic has significantly impacted performance indicators, leading to a decrease in demand for office space and a slowing rental growth phase, compounded by rising interest rates.
A closer examination reveals a polarization phenomenon, with secondary locations experiencing higher vacancy rates and potentially facing obsolescence from an investment standpoint. Conversely, central business districts (CBDs) and neighboring submarkets benefit from increased demand for smaller, higher quality office spaces, which are expected to reap significant long-term advantages. Hence, there is a growing division between prime and secondary markets.
Despite the negative overall performance, some secondary submarkets are well-positioned to benefit from these shifts. Natixis CIB Real Estate Research has designed a scoring grid for assessing the value of these select secondary locations.
The analysis emphasizes the multiple shades of location attractiveness within each district, particularly related to public transportation accessibility and roads, based on the commuting patterns of office workers.
Natixis CIB Real Estate Research dedicated a webinar to the Paris office market in the presence of Irène Fossé, Director, Research & Strategy Europe - AEW and Béatrice de Quinsonas, Research Director - BPCE Solutions immobilières.
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