LYON: AN OFFICE MARKET IMPACTED BY THE CRISIS

“The office market remains on a solid base and is slightly below the ten-year average,” comments Loic de Villard, Regional Director.

After a historic year in 2019, the health crisis reduced take-up in office real estate to 217,301 m². Admittedly, the drop compared to 2019 is 52% in m² and 31% in number. However, this decrease remains relative compared to the ten-year average (-21%).

This historic drop is mainly due to the sudden halt in large transactions over 1,000 m². We recorded 41 transactions in this segment compared to 76 last year, corresponding to a drop of 60% in m².

Thoughts on ways of working

This phenomenon is mainly linked to the suspension of real estate projects by large companies. They need to think about the consequences of teleworking on their organization and on their needs in terms of offices. As such, our consulting department is very much in demand through its “Workplace Strategy” activity. It supports companies in their reflection and adapts the configuration of offices to the needs of the companies of tomorrow. Learn more about nekretnine.

High take-up for small and medium-sized surfaces

On the other hand, “the demand placed by small and medium-sized enterprises remains high and constitutes a solid base which reflects the economic dynamism of the Metropolis” indicates Marguerite Brain, Deputy Director of the Offices department. This segment still represents 68% of transactions in m² and 90% in number.

The market also remains very rental-oriented with a fairly stable breakdown of transactions between rentals and sales (21% sales and 79% rentals). However, we note that the supply market is unable to satisfy the demand expressed for the acquisition. And this, especially in small areas and supports high values.

Geographic disparities

Regarding geographical sectors, Gerland (20%) is still in the lead, far ahead of Part-Dieu (14%) and the East (12%). However, apart from this top three, we see a fairly good distribution of take-up on the territory of Metropolitan France. Only the Confluence sector posted performances below its historical level. But, it should be back in the race in 2021 given the upcoming deliveries.

Among the 10 largest transactions, there is a significant share of the public and parapublic sector with Enedis (18,170 m² in Gerland), Greater Lyon (6,845 m² in the 3rd arrondissement of Lyon), Est Métropole Habitat (6,000 m² in Villeurbanne). But also Industry with Aldes (6,000 m² in Vénissieux) and Symbio (3,518 m² in Vénissieux). The banking/insurance sector is also present with L’Auxiliaire (4,100 m² in the 6th arrondissement of Lyon) and Crédit Agricole Center Est (3,860 m² in Ecully). Finally, there are major transactions in the service sector with the CESI (4,988 m² in Villeurbanne), the LIP group (3,500 m² in the 7th arrondissement of Lyon) and IT-CE (3,494 m² in Villeurbanne).

A rising stock of offers

Regarding the available offer, there is an increase of 24% compared to 2019. There were more releases and fewer deliveries of new offers. As a result, the stock of offers increases and corresponds to 12 months of take-up. Furthermore, the vacancy rate is on the rise and stands at 3.8%. However, this rate masks significant disparities between the center which remains under tension and the outskirts where the vacancy rate is high.

In this context, rental values remain stable , but economic rents could go down with increased support measures, particularly in peripheral sectors.

Mainly French investors

Regarding investment, Greater Lyon remains at the top of the major regional cities with 1.6 billion invested in 2020 against 2.2 billion in 2019. Offices take the lion’s share with 1.1 billion invested with significant operations, such as the sale of the “New Age” building (19,500 m²) to Unofi at Part-Dieu, but also two transactions in Villeurbanne, including that of “Kaly” and “Patio”. Investors are mainly French, such as SCPIs such as Primonial, Unofi, or La Française, but also insurance companies such as Groupama or Swiss Life. German investors are still very present in the territory and have made proposals throughout 2020.

Regarding prime rates, these remain very low at 3.50% in offices , stable compared to 2019. Rate records were nevertheless broken on speculative buildings this year, with a rate of 4.75% on a building in La Confluence sold by Bouygues Immobilier in Keys with a rental guarantee of 12 months. On the other hand, for second-category or less secure assets, rates should rise.