Paris office market boosted by French economy

Men look at their mobile phones as they walk on the esplanade of La Defense in the financial and business district of La Defense, west of Paris, France March 26, 2018. REUTERS/Gonzalo Fuentes

PARIS (Reuters) - Demand for office space in the Paris area rose in the first quarter to its highest since 2006, driven by improving economic growth, data from Immostat showed on Monday.

With the French economy growing at a 2 percent rate and unemployment hitting a nine-year low, increased business confidence has helped spur demand for office space in the city, which is also picking up financial market business leaving London due to Brexit.

Office take-up in the Paris region grew by 13 percent in the first quarter year-on-year to 741,800 square meters, data from the Immostat body that compiles the statistics directly from real estate firms showed.

“All these good results are explained by a robust economic activity,” Eric Siesse, an executive at BNP Paribas Real Estate said in a statement.

The average cost of renting new or refurbished space in the region increased by 5 percent over the year to 381 euros per square meter, its highest since the third quarter of 2012, amid strong leasing activity and low availability rates.

In Paris the vacancy rate was 2.6 percent, a historical low, BNP Paribas Real Estate said. Available space is especially low in the French capital’s central business district around Champs Elysees avenue.

Reporting by Maya Nikolaeva; Editing by Leigh Thomas