Olympics push Paris ahead of London in Global Cities survey

London has to play catch-up as Paris has been buoyed by the success of the Olympic Games it hosted in the summer, according to the London Property Alliance’s latest Global Cities Survey.

“The key indicators suggest that Paris is benefitting from a bounce associated with the Olympics,” said Charles Begley, chief executive, London Property Alliance. “The afterglow of preparing and putting on a successful games places Paris on a strong footing to compete with London for talent and investment.”

The French capital has pushed ahead of London across several key economic indicators. Office vacancy has plummeted to 2% and rents have risen by 9.9%, compared to just 1% a year ago, while economic growth in 2024 is +1.3% compared to 0.9% in the UK capital.

The number of people currently in employment in Paris is also 7.3% higher than its pre-pandemic level, while there has been almost no growth in the employment market in London.

Paris is also seeing the highest level of public transport ridership, with passengers numbers up 15% on pre-pandemic levels following the completion of the Grand Paris Express project in June. This suggests that a higher proportion of workers are choosing to work in offices, boosting the city’s culture, retail, leisure and hospitality sectors. A recent survey by the think tank Centre for Cities found that Parisians are going into the office 3.5 days of the week compared to 2.7 in London. 

However, the robust performance of central London’s office markets, which is consistent with previous quarters, suggests continued confidence in London’s fundamentals.

The report finds that the West End office market witnessed the strongest levels of prime real estate rental growth (12%) of all office submarkets compared in the Global Cities Survey, while City of London rents rose by 8.8%. London’s market is expected to witness a 5.3 million sq ft shortfall in new, modern office space, with vacancy rates in the West End at its lowest level since 2020, increasing upward price momentum.

“Business confidence is good in both London and Paris, as evidenced by rising office rents and low vacancy rates, and London remains ahead on foreign direct investment,” said Begley. “Despite this, the increasing divergence in economic and employment growth suggests London’s success cannot be taken for granted.  We must continue to invest in world-class infrastructure and workspace or risk being left behind by competing global cities.”

London is outperforming its rivals on foreign direct investment (FDI) with 75 overseas investments recorded in the latest quarter, including major infrastructure and real estate transactions. This is significantly ahead of New York (45) and also Paris (28), where the Olympics is likely to have caused a temporary deferment in some moves. Economic uncertainty in Germany saw Berlin’s FDI projects plummet to 17 from 75 projects two years ago.