Offices in Ile-de-France

new cycle, new strategies

The office real estate sector is profoundly changing.

It must address the major issues with which it is directly faced: insertion of the “smart city”, driverless cars, technological innovations, changing working methods, rise in management policies integrating ESG (Environmental, Social and Governance) criteria. In our new study on office real estate, we review the evolution of this asset class and give you the Primonial REIM investment strategy.

Schéma : l’immobilier de bureaux

Office property: the dawn of a new cycle

The reorganisation of the office property market, with the attractive assets on one side and the obsolete assets on the other, continues under the influence of the responses provided for these new issues. The increasing concentration of jobs and the interconnection of employment hubs will be determining factors in making commercial markets attractive. According to an ORIE (Regional Commercial Property Observatory) report the forces at work now seem to be a clear sign that the existing commercial hubs can be expected to continue to become concentrated. Accessibility will therefore contribute to the reorganisation of sectors regardless of whether the hubs are located in Central Business Districts (QCA) or peripheral zones.

Over the last ten years, property investors have for the most part opted for Core or Core+ assets that offer stable returns. The accommodating monetary policies of central banks have fed this trend by encouraging asset values to rise.


This sovereign spread lowering cycle seems to be reaching an end and we are currently moving into a low interest rate environment. This situation will have an influence on office property since a threshold seems to have been reached for “prime” property assets.

The economic and financial context seems to indicate that we are entering a property cycle transition period pushed by capital growth into a value creation oriented cycle.

This is a case of the “value investing1” approach being applied to property. It will need to lead property investors to identify the new markets where prices remain affordable and/or where there may be the benefit of a positive rental market development to create value.

Primonial REIM’s office property convictions

At Primonial REIM we feel that the location, dynamic and increasing concentration of employment hubs in relation to the improvement of transport network interconnectivity, as well as the low interest rate context are all clear signs of a cycle which will push for an adjustment in investment strategies. In this survey we took a close look at office property in the Euro Zone and the regions around Paris in particular. After analysing the investment and rental markets, we used a regional approach to overlay public transport perspectives (Grand Paris Express) and employment hubs in order to produce evaluation and selection tools for the region’s commercial markets.

1 This investment strategy was first mentioned by Benjamin Graham in ‘Security Analysis’. The strategy involves acquiring a financial asset at a price significantly below its value, producing relatively attractive long-term returns in terms of the risk involved.

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The team

Daniel While
Daniel While Research, Strategy & Sustainability Director

Henry-Aurélien Natter
Henry-Aurélien Natter Research Manager

Adrien Isidore
Adrien Isidore Economist Statistician

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