H FRENCH MARKET REPORT CORPORATE REAL ESTATE

Transcription

1 H1 214 FRENCH MARKET REPORT CORPORATE REAL ESTATE SNAPSHOT AND OUTLOOK POSITIVE POINTS Measures taken by the ECB on the 5 th June which should give some fresh impetus to the economy France s best year for corporate real estate investment since the 28 crisis, due to giga-deals this year Some easing of the Pinel Act and the phasing of its implementation POINTS TO BE MONITORED As yet, no tangible economic recovery nor any job creation in prospect, despite the reforms A lack of visibility for businesses, inhibiting their real-estate decision-making Highly-restricted and selective corporate real-estate investment opportunities Rents previously under pressure, showing signs of growth, albeit slow INDICATORS FOR THE 1 ST HALF 214 Data H1 214 Change / H1 213 Change / H2 213 Provision for year end Ile-de-France office rental market Take-up 1,1, m² 2,1, m² Vacancy rate 7.7 % 7.5 % Supply at one year 5,25, m² 5,2, m² Prime rent in Paris CBD 75 / m² 75 / m² Average rent 2 nd -hand 323 / m² 33 / m² Investment in France Investment volume 1.7 bn 2 bn 4. % 4. %

2 H1 214 FRENCH MARKET REPORT 2 ECONOMIC OUTLOOK ANNUAL GDP GROWTH AND UNEMPLOYMENT RATE AT PERIOD-END (%) (%) Annual GDP growth (by volume) 9,7% 1 1,2% 8,%,4%,7% (prov.) (prov.) Metropolitan-France unemployment rate (ILO definition) SOURCES: EUROSTAT, INSEE, FRENCH MINISTRY OF THE ECONOMY, EXPERIAN FRANCE S PUBLIC DEBT AS % OF GDP Maastricht ceiling 6 % A PERIOD OF DISINFLATION, THOUGH NOT OF DEFLATION Not only were growth forecasts for 214 revised to below 1% in the 2 nd quarter and unemployment levels failed to stop rising, but inflation remained staggeringly low with INSEE stating that it stood at.7% in 213, and it should rise to at most 1.3% in 214 before falling back to 1.1% in 215. Even the impact of the rise in VAT (with the standard rate moving from 19.6% to 2% and the intermediate rate, from 7% to 1%) in effect from the start of January, has remained faintly unnoticeable to date. The various indicators GDP, unemployment and inflation - vary from one country to another in Europe but overall, the situation within the Euro Zone remains highly precarious, with quarterly GDP trends appearing unpredictable and vulnerable to the slightest external event, such as adverse weather. This combination of factors is causing fear in some quarters that Europe and France may experience a period of deflation which would have severe and lasting consequences. For the record, Japan went through a period of deflation from 1999 to 25, from which it had great difficulty emerging. Among other effects, these years of falling prices accelerated the rise in Japanese public debt. and in France at end 213, there are legitimate grounds for fearing deflation, which would do nothing but worsen the situation. Deflation is a vicious circle in which anticipated falls in prices deter consumption and hence causes demand to fall. The resulting reduction in activity causes incomes to fall and hence also tax revenues, leaving very limited room to manoeuvre for governments, for businesses to keep to their budgets and for households to make ends meet. Experts currently estimate at some 15% the probability of deflation materialising. Its probability therefore remains low and economists merely envisage disinflation (i.e. a slowing of the rise in prices and not a fall in prices). In actual fact, no economic transactor currently expects prices to fall, and some economic surveys rather suggest since June a slow improvement in the general context. Furthermore, the technical decisions of the ECB and the lowering of its key rate to.15% on the 5 th June should finally put paid to the spectre of deflation. Thus, due to these measures designed to inject liquidity into the real economy until at least 216, the French and European economies should hold out while awaiting a firmer period of growth in the medium-term (prov.) Given the persistently lacklustre growth and the already-high levels of public debt - well above the 6% Maastricht ceiling - observed in Europe INFLATION / ECB KEY RATE (%) Inflation ECB rate

3 H1 214 FRENCH MARKET REPORT 3 ECONOMIC OUTLOOK MAP OF THE 14 NEW FRENCH REGIONS AS OF JUNE 214 BRETAGNE PAYS-DE-LA-LOIRE AQUITAINE CENTRE LIMOUSIN MIDI-PYRÉNÉES AUVERGNE BOURGONE PROVENCE-ALPES- CÔTE-D AZUR LANGUEDOC- ROUSSILLON ALSACE LORRAINE RHÔNE- ALPES POITOU- CHARENTES NORD-PAS- DE-CALAIS HAUTE PICARDIE NORMANDIE BASSE NORMANDIE ÎLE-DE-FRANCE CHAMPAGNE- ARDENNE FRANCHE- COMTÉ REFORMS THAT ARE NECESSARY, THOUGH STILL NOT EFFECTIVE Although unpopular, the measures increasing tax are proving unavoidable. Complementing this attempt to restore balance to the public finances, one of the major thrusts in the government s action to support a convalescent French economy is the Solidarity Pact. Under this scheme some 41 bn are expected to be spent up to 217, even though the positive effects of these initiatives remain difficult to anticipate: estimates vary from 19, to 3, job creations with the inclusion of the CICE (Crédit d impôt pour la Compétitivité et l Emploi = Competitiveness and employment tax credit). inter-municipal mapping, based on living areas with 2, or more inhabitants. This is expected to come into force on the 1 st January 218. In addition, as from the 1 st January 215, the main conurbations in France such as Lyon and Aix-Marseille-Provence will be organised into a dozen metropolitan areas. These new entities will have wider powers, particularly in the areas of economic development, urban planning, housing and transport. The greater- Paris metropolitan area will emerge later, on the 1 st January 216. These territorial reforms will undoubtedly impinge upon the real-estate sector as a whole. CORSE PERFORMANCE COMPARISON OF THE ICC AND ILAT INDICES ON A ROLLING-YEAR BASIS (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Source : INSEE ICC = French cost of construction index ILAT = French office and light industrial rental index These measures will have virtually no effect in 214, and the unequivocally harsh verdict conveyed by the municipal elections in March measures the extent of French scepticism at the government s economic policy, even though it strives for budgetary restraint to reduce the public-sector deficit and public debt. Out of its ambitious programme for rationalising public expenditure to save 5 bn by 217, the State on its own should achieve savings of 18 bn. Another significant contributor, with savings of 11 bn, is the simplification of government illustrated by the redrawing of the regions announced in mid-june. This move seeks to cut down their number to 14 enlarged regions by 22 as against the present 22. This redrawing of the territorial boundaries will partly free France from its costly multi-layered government, which also engenders decision-making inertia, to base it on regions of a size consistent with those of other countries in Europe, thereby enhancing its economic attractiveness. At a more local level, this redrawing of the boundaries will go hand-in-hand with a new The other highlight for corporate real estate this year is the passing of the Pinel Act, which has been in force since the 2th June 214. Some of its decrees are still awaited for September but, in broad outline, this legislation is more favourable to tenants and places more constraints upon landlords, particularly through the lengthening to 3 years of the term for simplified commercial leases; the obligation to draw up a schedule of condition with representation of both parties; the limitation on service charges; taxes and works costs that can be passed on to the tenant; tighter controls on rent increases via amendments to the rentcapping rules and the choice of benchmark indices. Thus, in the event of a rent review or renewal, only the ILAT or ILC commercialproperty rent indices will now apply. On the other hand, after some hesitation, the Pinel Act has finally left contractual freedom in choosing the index for indexing rents under commercial leases and includes scope for continuing to sign leases for a firm term of more than three years for both office and storage uses.

4 H1 214 FRENCH MARKET REPORT 4 INVESTMENT CORPORATE PROPERTY INVESTMENT IN FRANCE, BN H H PORTFOLIO SALES IN FRANCE IN VOLUME AND IN NUMBER ( Bn) H1 213 H2 213 H1 214 (Nb) INVESTMENT: FROM MEGA-DEALS TO GIGA-DEALS Against the background of a gloomy economic context, the French investment market for corporate property surprises with each quarter by its strength. As at end June, almost 11 bn had been invested, suggesting that 214 will be the best year since 28, with an annual investment volume likely to attain 2 bn. This trend is therefore opposite to the forecast for GDP in France, which was eroded during the 2 nd quarter. Whereas last year, this investor euphoria appeared uncorrelated with market fundamentals, in 214, it is consistent with the sustained office rental activity in the Ile-de- France region. This resumption of investment in corporate real estate, which began in 212, is largely due to mega-deals and is a pattern that is set to last. The 21 transactions of in excess of 1m represent 75% of the French market, and amounted to 8 bn. This proportion appears to be setting a new standard for the 21 / 22 decade, without any limit to the tremendous size of the transactions: in the 1 st half 214, 3 acquisitions were concluded, each exceeding 1 bn. The first concerns the Coeur Défense prime commercial property in the eponymous business district, the second was for a portfolio of shopping malls distributed throughout France, and the third was for the sale by Risanamento of its portfolio of Paris offices and shops. This impressive scoreboard confirms the French market s appetite for 1 bn deals, which has been sudden but remains sustainable. To find transactions on such a scale, one needs to go back to 27, in the days before the world financial crisis. Furthermore, it is the first time that several giga-deals exceeding 1 bn have materialised the same year. Thus, the total of the 3 largest transactions in the 1 st half 214 reached almost 4 bn, compared with an average 3 bn annually from 26 to 27. Besides their expanding size, the nature of these huge transactions is observed to be changing. Whereas in 212/213, the transactions mainly prestige Parisian assets - the renowned trophy assets, relentlessly sought by Asiatic and Middle-Eastern sovereign wealth funds - office properties in the Paris CBD do not feature for the time being among the top 1 acquisitions for 214. Only the assets sold by Risanamento match these criteria, but disregarding the price, the impact of their exceptional nature is mitigated by the portfolio effect. The mega-deals market is undergoing a diversification - a new trend for 214. Portfolio sales are sailing before a following wind, contributing almost 4 bn this half-year, with for example some ten portfolios of shops or industrial assets changing hands. The market players are also evolving: the most spectacular transactions are being made by investment funds and asset managers, particularly from the English-speaking world, accounting for 57% of amounts invested in the last 6 months. THE 5 LARGEST TRANSACTIONS SINCE 26 Year Real estate asset Type Location Price bn 27 Coeur Défense Offices La Défense Carrefour portfolio Shops France Coeur Défense Offices La Défense Risanamento Portfolio Shops / Offices West of Paris Kanam / Mines de la Lucette portfolio Offices Paris / Hauts de Seine 1.1

5 H1 214 FRENCH MARKET REPORT 5 INVESTMENT BREAKDOWN BY TRANSACTION SIZE, 1 ST HALF 214 ( BN) 52% 16% 23% 9% < 5 M 5 to 1 M 1 to 5 M > 5 M PROFITABILITY OF OFFICE REAL ESTATE COMPARED WITH THE 1-YEAR FRENCH GOV. BONDS (OAT) (%) A CORE MARKET STILL IN THE DOLDRUMS However, diversification is slow in working through to the market as a whole. Thus the decreasing significance of small to mediumsized transactions has been an increasing feature of the investment market since 212. Its persistence makes this core-market inertia worrying. Some assets put on the market are not liquid and are attracting limited interest. Yet investors targeting assets priced at less than 5m have much to choose from, since the sellers are potentially numerous. But these purchasers, sometimes less specialised in real estate or having less liquidity, have themselves also become extremely selective, and risk-taking remains hard to defend before investment committees due to the lack of visibility over economic prospects and hence, transactions are still infrequent. The yields for prime locations stand at between 4 and 4.25% in West of Paris / CBD for the best office and retail products. These yields remain attractive, even given the present content of particularly low borrowing rates. With the recent lowering of the ECB key rate and the disinflationary trend, the OAT rate is decreasingly likely to turn upwards rapidly, so that real estate should retain a satisfactory liquidity premium compared with other asset classes, at around 22 to 25 bp, for the remainder of the year, given corporate real estate s consideration as a safe-haven investment. For non-prime assets, yields rate spreads can be wide, often being theoretical in the absence of a relevant benchmark. This means that opportunities can be seized upon for acquiring properties requiring upgrading to reposition them on the rental market. Some types of investors have prepared themselves for this and are starting to become active again in this market segment, which perhaps marks a start to diversification - but this trend remains to be confirmed in the coming months, since few are prepared to depart from the prudent stance which is still the rule H1 214 Risk premium on prime office property in Paris CBD Return on risk-free bonds (1-year OAT annual average), BANQUE DE FRANCE

6 H1 214 FRENCH MARKET REPORT 6 PARIS OFFICE MARKET HALF-YEARLY TAKE-UP CHANGES (M² MILLION) H1 211 H2 211 H1 212 H2 212 Half-yearly take-up Half-yearly average H1 213 H2 213 TAKE-UP GEOGRAPHICAL BREAKDOWN 11% 1% 34% Paris Hauts-de-Seine Outer suburbs 9% 36% La Défense Paris North-East inner suburbs H1 214 TAKE-UP BY SEGMENT OF SURFACE AREA IN 1 ST HALF OF EACH YEAR (M² MILLION) THE OFFICE MARKET IN THE ILE-DE-FRANCE REGION: BUOYANCY AND WEAKNESSES The 2 nd quarter 214 was very active with 6, m² of take-up, 15% higher than the quarterly average for the last 5 years. Thus, after a slow start to the year, office take-up in the Ilede-France region turned out at over 1.1 million m² for the 1 st half-year. After the low in 213, this 24% rebound within 6 months allows for the smoothing of demand over one year. For 214 as a whole, forecasts estimate 2.1 million m² of take-up. Occupiers show either a measure of optimism in an economy in the process of stabilising, or of opportunism, by taking advantage of economic rents that are still marked down. Additionally, some landlords and tenants may have signed in this half-year in anticipation of the forthcoming effects of the Pinel Act, whereas the uncertainties surrounding the draft of that Act had slowed the market in late 213 / early 214. This upturn in activity in the Ile-de-France region is chiefly due to the return of major transactions, 32 in number accounting for 47, m². But in parallel, transactions for areas of between 6 to 1,5 m² grew more than 4% in this half-year, throughout the region s territories. The wait-and-see attitude of small businesses in 212 / 213 was less marked, undoubtedly explaining this exceptional rebound. The top-of-the -market business districts are once more becoming the main drivers of the market. In Paris, transactions in small-sized units rose 12% compared with the 1 st half 213. In the Hauts-de-Seine region, take-up is now distinctly recovering after a mixed first-quarter performance. This department has represented 42% of transactions in the Ile-de-France region so far this year. After a tense 213, 5 largescale transactions are beginning to restore balance to the La Défense market. In contrast with these positive trends, transactions of between 1,5 to 5, m² reached their lowest level since the 1 st half of 29, accounting for only 17% of take-up, compared with an average 22% over the last 1 years. This dip in medium to large units is probably due to the intensification of corporate regroupings for areas above 5, m², mostly in new or refurbished properties, with the aim of rationalising their occupancy rates and realestate costs. The recent tendency for landlords to accept divisibility of their large offers from 2, m² upwards should shortly inject new dynamism into transactions of between 1,5 and 5, m² by allowing access to better-quality properties for new occupiers, such as large, growing SMEs. This is because all businesses continue to prefer higher-quality premises and, by way of example, in the case of transactions below 5, m², renovated premises reached their highest proportion for the decade at 4%, as against the 32% average. This occupier search for quality is a factor driving constant improvement of the office park, which is very encouraging. The only downside to this is that it tends to inhibit the sales to owner-occupiers, which has accounted for only 8% of the market so far this year, as against an average 15% for the period 29/213: the offers proposed for purchase are rarely to businesses expectations. to 6 m² 6 to 1,5 m² 1,5 to 5, m² > 5, m²

7 H1 214 FRENCH MARKET REPORT 7 PARIS OFFICE MARKET SUPPLY AT 1 YEAR (M² MILLION) Q2 28 Q4 28 Q2 29 Q4 29 Q2 21 Q4 21 Q2 211 Q4 211 Q2 212 New and refurbished properties Second-hand properties Q4 212 Q2 213 Q4 213 Q2 214 ILE-DE-FRANCE SECOND-HAND RENTS INDEX 12 1 SLIGHT FALL IN OVERALL SUPPLY Immediately available supply has been stable for several months and the vacancy rate is now holding steady at 7.7%. One year supply, on the other hand, is slightly down compared with the end of 213. This fall is not common to all supply, however, and hence, some fears persist. Firstly, an upward trend remains perceptible in Paris, and in the inner and outer suburbs, and therefore for virtually the whole of the market, and the fall in supply in the Hauts-de-Seine appears to be the exception to the rule and is the first fall in supply observed for at least 6 years in these business districts to the West of Paris. Secondly, the fall in supply is mainly felt in offers exceeding 5, m², but here again, small-sized products are re-experiencing growth. One of the reasons for this increase is that 78% of the major offers, an unprecedentedly high proportion, are now made up of areas that can be split up. The slowdown in activity recorded in 213 compelled landlords to divide their properties in the hope of marketing/letting them more quickly. Hence, the remaining stock comprising principally of older building with areas smaller than 5, m² has risen by some 7% in the last 6 months. Thirdly, there have been several vacations of second-hand space in recent months, whereas occupiers continue to prefer more upmarket/ modern quality premises. Unsurprisingly, therefore, availability of new, refurbished or renovated space is falling, while space in usable condition has increased by 4% since December 213 to revert to the 29 level with almost 2.3 million m² available. This accentuating dichotomy undeniably points to fragility in the market in its current state, and this will require close monitoring. 8 Q1 28 Q3 28 Q1 29 Q3 29 Q1 21 Q3 21 Q1 211 Q3 211 Q1 212 Q3 212 Q1 213 Q3 213 Q1 214 RETURN TO THE MEDIUM TO LONG TERM AVERAGE IN PARIS AND LA DÉFENSE AVERAGE RENTS, NEW AND REFURBISHED OFFICES ( /M²/YEAR EXCL. TAXES AND CHARGES) H1 25 H1 26 H1 27 H1 28 H1 29 H1 21 H1 211 West of Paris / Central business District (CBD) Boulogne-Bilancourt H1 212 H1 213 H1 214 La Défense Saint-Denis Over a ten-year review period, the rent index for second-hand property exhibited two entirely distinct phases. Until 28, it kept pace with economic growth in a firm, and pronounced uptrend. This virtuous cycle was then broken by the crisis in 28 / 29, restraining this rent index to a degree of stability: since 211, it has continually oscillated between 16 and 18. The currently gloomy economic situation, weighing down this index, is on the whole adequately counterbalanced by the diversity of the fabric in the Ile-de-France region, imparting a measure of resistance to the market. In Paris, values are 2 /m² above their longterm average, benefiting from renovation projects. However, despite landlords continued efforts, renovated office transactions are beginning to lose momentum, representing 41% of take-up this half-year in the West of Paris, compared with over 46% in the 1 st half 213. In the inner and outer suburbs, on the other hand, average 2 nd hand property rents have fallen 2% in recent months. Occupiers have preferred to position themselves in the least expensive premises and take-up of premises at rents below 15 /m² have leapt 2%. Rents for new and refurbished offices are becoming very much more volatile owing to the scarcity of transactions for these assets. Overall, though, they have returned to a level close to their average since 25, both West of Paris (59 /m²) driven by 3 transactions above 7 /m², and at La Défense (5 /m²), where 2 leases were signed above 52 /m² that had not materialised last year. By contrast, at Boulogne-Billancourt there is a downtrend continued, with an index currently in the region of 4 /m².

8 H1 214 FRENCH MARKET REPORT 8 PARIS OFFICE TRANSACTIONS > 5, M² ILE DE FRANCE REGION TAKE-UP AND THE PROPORTION > 5, M² IN 1 ST HALF OF EACH YEAR (M² MILLION) % 27 % 34 % Over 5, m² 41 % 43 % Ile-de-France region take-up TAKE-UP > 5, M² BROKEN DOWN BY TRANSACTION SIZE IN H % 25% 21% 27% 5, - 1, m² 1, - 2, m² 2, - 4, m² > 4, m² VERY LARGE-SCALE TRANSACTIONS: COMING BACK WITH A VENGEANCE With 32 transactions for areas greater than 5, m2 and total take-up of 47, m², equivalent to 43% of the market, the 1 st half 214 is the best first half-year since 28. This marked improvement is mainly attributable to the return of transactions for more than 4, m²: 3 such transactions have been concluded since the start of the year, whereas none occurred in 213. This is tending to even out the transaction size distribution, similar to the 211 distribution, and each area segment accounts for between 21 to 27% of the market, with an average transaction size being 14,665 m². New and refurbished office space remains by far the majority (7% of the large floor areas), with 55% pre-let, as seen last year. On the other hand, proprietary transactions, which had milestoned 213 in a context of economic stagnation, have become less numerous, since developers are relatively more successful in securing firm occupier commitment to their projects. In any case, in the investment market, the resumption of sales VEFA developments (future completions) also shows a renewed confidence favourable to new construction projects. Other positive factors have also been seen. Firstly, in Paris, 12 transactions totalled a take-up of 12, m², a half-year level roughly equal to the level for 213 as a whole. Secondly, after a listless 213, several significant transactions were completed at La Défense, including KPMG, which took up some 4, m² in Tour Eqho. This upturn is welcome, even though supply still exceeds demand in Europe s premier business district. Thirdly, in the outer suburbs, take-up of areas above 5, m² is increasing due to the SAFRAN purchase of 43, m² at Magny-les-Hameaux. However, less positive signals remain. In the last 18 months, companies leaving Paris for the Hauts-de-Seine and Seine-Saint-Denis account for 16% of take-up volume, compared with 9% in the previous 18 months. In every case, this relocation is clearly encouraged by lower rents per m2, and generally, 42% of areas taken up are motivated by regrouping and/or the search for cost savings. Apart from this lack of interest for the capital, endogenous movements account for 73% of take-up since 213: businesses are seeking better quality premises while as far as possible avoiding disruption of their staff s commuter journeys. This is reflected among others by a 31% volume increase in renovated office space compared with the 1 st half 213. With this aim of financial optimisation, headline rents for transactions above 5, m² are still on a downward trend, and incentives remain substantial, in the order of 2.5 months rent-free per firm lease year. The fall in supply, combined with the resumption of activity this year, should nevertheless gradually ease these incentives downwards. However, this will probably not occur before mid to late 215, when economic growth will be somewhat more perceptible, since the long-drawn-out negotiations currently in progress remain favourable to tenants. MOTIVATION FOR MAJOR OCCUPIERS MOVING IN (ON A SAMPLE OF 6 TRANSACTIONS, M² MILLION) Regrouping Cost savings Modernity Extension Other

9 H1 214 FRENCH MARKET REPORT 9 PARIS OFFICE TRANSACTIONS > 5, M² FUTURE SUPPLY (M² MILLION) Certain Immédiat Incertain Moyenne de placement neuf / restructuré > 5 m² depuis 5 ans FUTURE SUPPLY: TREND TOWARDS SCARCITY IN 216 Under the influence of the major transactions, which have become very significant, some future supply weakened in recent months. Thus, in 214 and 215, over 1.2 million m² are due to be delivered. On average, 66, m² are taken up yearly in new or refurbished offices, and this level of supply therefore appears sufficient to meet demand in the 2 nd half 214 and for the year 215. Beyond this time horizon, market players are remaining very cautious. A sizeable number of projects are still under consideration and are hence, uncertain. By 217, potentially 2 million m² could fuel the supply of offices in the Ile-de-France region, but a large proportion of these transactions may well be deferred, with the remainder only emerging in the event of pre-letting. The proportion of projects launched speculatively will therefore constitute the available stock in 216 and 217. Even though this proportion is low, it will not generate a risk of shortage since the demand drivers are slow in turning upwards against a background of prolonged economic stagnation. In parallel, the supply of 2 nd hand property has been rising steadily for several years, and for such offers to find takers will require at least some renovations. If begun by the end of 214, refurbishments of these existing and often obsolete offices into buildings compliant with the latest environmental regulations would be highly likely to attract tenant interest from end 215 onwards. MAP OF MAIN MOVES BY LARGE OCCUPIERS IN 213/214 5,2 m² Value Endogenous movements Hauts-de-Seine 6,8 m² 7, m² 433, m² Paris Ouest + 7 ème 115,9 m² 33,4 m² 35,7 m² Paris Hors QCA 26,4 m² 5,8 m² Seine-Saint-Denis 7, m² 81,2 m² 33,1 m² DEFINITIONS : Exogenous movements 64,2 m² 11,2 m² Val-de-Marne Endogenous movements: moves by companies within their original department. Exogenous movements: moves by companies choosing to leave their original department.

10 H1 214 MARKET INDICATORS = TAKE-UP H1 214 FRENCH MARKET REPORT 1 N Sector to 6 m² 6 to 1,5 m² 1,5 to 5, m² >5, m² Total Change / H Paris Ouest 99,1 m² 51,2 m² 29,8 m² 61,8 m² 241,9 m² 2 Paris Sud 12,9 m² 1,9 m² 5,5 m² 24, m² 53,3 m² 3 Paris Est 18,7 m² 1, m² 4,5 m² 5,3 m² 38,5 m² 4 Paris Nord 19,8 m² 12,4 m² 3,9 m² 29,7 m² 65,8 m² SUBTOTAL PARIS 15,5 m² 84,5 m² 43,7 m² 12,8 m² 399,5 m² 5 La Défense 6 m² 11,8 m² 23,8 m² 69,5 m² 15,7 m² 6 Courbevoie - Puteaux - Nanterre 11,3 m² 12,5 m² 17, m² 8,8 m² 49,6 m² 7 Neuilly - Levallois 13,8 m² 1,5 m² 14,9 m² 64,2 m² 13,4 m² 8 Hauts-de-Seine Nord 5,1 m² 8,1 m² 7,1 m² 13,5 m² 33,8 m² 9 Rueil - Saint-Cloud - Suresnes 6,5 m² 4,3 m² 1,6 m² 42,4 m² 54,8 m² 1 Boulogne - Issy 13,6 m² 13,2 m² 27,8 m² 32,7 m² 87,3 m² 11 Hauts-de-Seine Sud 8,9 m² 3,6 m² 7,6 m² 7,3 m² 27,4 m² SUBTOTAL HAUTS-DE-SEINE 59,8 m² 64, m² 99,8 m² 238,4 m² 462, m² 12 Ivry - Gentilly 6,7 m² 3,1 m² 3,7 m² m² 13,5 m² 13 Vincennes - Créteil 3,2 m² 2,2 m² 8,3 m² m² 13,7 m² 14 Montreuil - Bagnolet 1,6 m² 8 m² m² m² 2,4 m² 15 Pantin - Aubervilliers 1,6 m² 2,5 m² m² 45, m² 49,1 m² 16 Saint-Denis - Saint-Ouen 4,1 m² 2,4 m² 3,3 m² 1,4 m² 2,2 m² SUBTOTAL INNER RIM 17,2 m² 11, m² 15,3 m² 55,4 m² 98,9 m² 17 Saint-Germain-en-Laye 2,4 m² 6 m² 1,6 m² m² 4,6 m² 18 Versailles - Vélizy 5,4 m² 6 m² 3, m² 11,6 m² 2,6 m² 19 Saint-Quentin-en-Yvelines 3,4 m² 2,9 m² 5,1 m² 43, m² 54,4 m² 2 Saclay - Courtaboeuf 3,2 m² 2,5 m² 3,8 m² m² 9,5 m² 21 Massy - Antony 1,6 m² 3,6 m² 2,1 m² m² 7,3 m² 22 Orly - Rungis 1,8 m² m² m² m² 1,8 m² 23 Évry 1,6 m² 1, m² 2,3 m² m² 4,9 m² 24 Marne-la-Vallée 4,8 m² 2,9 m² m² m² 7,7 m² 25 Paris Nord 2 2,1 m² 5,2 m² 5,8 m² m² 13,1 m² 26 Bassin d'argenteuil 4 m² 6 m² 4, m² m² 5, m² 27 Cergy-Pontoise 1,4 m² 1,8 m² m² m² 3,2 m² 28 Autres secteurs de 2 nde couronne 3, m² 4,1 m² 2,1 m² m² 9,2 m² SUBTOTAL OUTER RIM 31,1 m² 25,8 m² 29,8 m² 54,6 m² 141,3 m² TOTAL IDF REGION 258,6 m² 185,3 m² 188,6 m² 469,2 m² 1,11,7 m²

11 H1 214 MARKET INDICATORS = SUPPLY AND VACANCY RATE H1 214 FRENCH MARKET REPORT 11 N Sector Number Supply at one year Volume Change / H2 213 Immediately Available Supply Vacancy Rate Change / H Paris Ouest ,8 m² 471,5 m² 5.6% 2 Paris Sud ,6 m² 86,2 m² 2.9% 3 Paris Est ,7 m² 71,1 m² 2.9% 4 Paris Nord ,5 m² 119,3 m² 5.3% SUBTOTAL PARIS 1,65 1,259,6 m² 748,1 m² 4.7% 5 La Défense 58 6,4 m² 471, m² 14.7% 6 Courbevoie - Puteaux - Nanterre ,7 m² 258,1 m² 13.4% 7 Neuilly - Levallois ,4 m² 141, m² 1.2% 8 Hauts-de-Seine Nord 18 25,2 m² 228,7 m² 12.9% 9 Rueil - Saint-Cloud - Suresnes ,7 m² 168,4 m² 12.6% 1 Boulogne - Issy ,1 m² 25,3 m² 1.1% 11 Hauts-de-Seine Sud ,7 m² 241,6 m² 15.3% SUBTOTAL HAUTS-DE-SEINE 935 2,192,2 m² 1,714,1 m² 13.% 12 Ivry - Gentilly 92 92,4 m² 81,9 m² 7.% 13 Vincennes - Créteil 63 67,1 m² 55,2 m² 3.3% 14 Montreuil - Bagnolet 67 16,1 m² 95, m² 8.1% 15 Pantin - Aubervilliers 43 11,4 m² 9,7 m² 8.4% 16 Saint-Denis - Saint-Ouen , m² 16,6 m² 1.5% SUBTOTAL INNER RIM , m² 483,4 m² 7.3% 17 Saint-Germain-en-Laye 42 48,3 m² 44,6 m² 9.8% 18 Versailles - Vélizy ,9 m² 129,6 m² 9.5% 19 Saint-Quentin-en-Yvelines 1 142,1 m² 132,2 m² 8.6% 2 Saclay - Courtaboeuf ,8 m² 11,2 m² 13.6% 21 Massy - Antony 39 63,9 m² 48,2 m² 8.6% 22 Orly - Rungis 55 92,7 m² 9,7 m² 7.8% 23 Évry 45 79,4 m² 78,6 m² 13.1% 24 Marne-la-Vallée ,4 m² 117,8 m² 7.9% 25 Paris Nord ,1 m² 18,3 m² 12.2% 26 Bassin d'argenteuil 3 5,6 m² 47,1 m² 6.5% 27 Cergy-Pontoise 58 91,8 m² 89, m² 1.3% 28 Autres secteurs de 2 nde couronne 69 92, m² 76,3 m² 1.2% SUBTOTAL OUTER RIM 755 1,239, m² 1,72,6 m² 6.5% TOTAL IDF REGION 3,635 5,249,8 m² 4,18,2 m² 7.7%

12 H1 214 FRENCH MARKET REPORT 12 KEOPS Research 43-47, AVENUE DE LA GRANDE ARMÉE CS PARIS CEDEX 16 TEL +33 () FAX +33 () Puplication Director: Laurent Castellani Publication Editor: Isabelle Assens Research: Cindy Emond Databases: Stephen Bouazza Design: Loïc Sene Virginie Vardo - Coquoin