The Paris office market is benefiting from Brexit as banks move some staff out of London, according to Faro Capital Partners’ managing partner Guillaume Turcas, who said that while the investment market remains quiet in core locations, the trend has increased occupier demand.
The city previously received a lot of criticism about the capacity of the workforce to adapt, but now, he said, “we don’t have to be so humble in relation to that in France”.
Brexit helped Paris, as it did Frankfurt and Amsterdam, Turcas added. “A lot of the workforce from the banks and from the finance industry is coming across the channel to set up in Paris.”
He said that this is for many reasons, but Paris is the number two or three place for large banks that were headquartered in the UK, especially in London. “Mostly the American banks are drafting hundreds of people from London to Paris.”
Goldman Sachs or Bank and Bank of America and JP Morgan, for example, are taking much more space within the CBD and even the fringe CBD. “This is something that we’ve never seen before,” Turcas said.
“Most of the workforce is pleased to be in Paris rather than other cities, in Germany or potentially in the Netherlands,” he said, explaining that this is for living and family reasons.
The level of competition between tenants is intense and comparable to Luxembourg where competition is always intense. “We’ve never seen this in the CBD of Paris.”
Rents are also reaching levels that have not been seen before. “The €1,000-plus per sq m level was a kind of ceiling that was only touched back in the 90s and just before the IT bubble.”
But how this reflects in real estate investment values remains to be seen, he said.
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